City says US recession will affect Latin America

The chances of a “soft landing” in the United States are declining day by day amid rising interest rates to control the country’s highest inflation in four decades, while the risk of a “hard landing” is rising, the economic leader said. Latin America, Ernesto Ravilla. “This is bad news for the United States and Latin America,” he briefly told reporters this morning.

According to Ravilla, the recession in the United States is increasing its impact on Latin American countries, including Brazil. Potential effects include low growth and high depreciation of the region’s currencies.

“So basically low growth is a common class throughout the region. Latin America will not be as dynamic as it has been for the last 20 years,” Ravilla said. City Latham Media SummitThe event brings together Latin American journalists at the group’s headquarters in New York.

However, the economist thought that the city was still not working in the context of the recession in the US and the Federal Reserve (Fed, US Federal Reserve). Currently, Wall Street maintains a “smooth landing” expectation for the world’s largest economy, despite the country’s more aggressive austerity.

According to Latin America, according to him, there are two groups of countries with different performance in the region: one growing below the level of the last 20 years and the other above. Brazil has lower expansion rates than other countries such as Chile, Peru, Ecuador and Costa Rica. “We have a bad mix of external factors related to China’s recession, austerity in the United States, but also internal problems, especially politics,” Ravilla explained.

Especially with regard to Brazil, the City has recently raised its forecasts for the country. It began estimating a 1.4% increase in gross domestic product (GDP) in 2022, up from 0.7% previously. Next year, the Brazilian economy will see a city recession with a growth of 0.7%. “Brazil’s economy is better than expected,” he said. However, in the last 20 years, the average growth in Brazil has been only 3%, says Ravilla.