LATIN AMERICA / CARIBBEAN (IDB) – The value of exports from Latin America and the Caribbean grew by an estimated 4.1 percent in 2024, recovering from a 1.6 percent decline in 2023, according to the latest edition of Trade Trends Estimates for Latin America and the Caribbean.
The report attributes the export growth to higher shipment volumes, as prices stagnated. While the trade outlook for Latin America and the Caribbean has improved significantly over the past year, with the region’s exports exiting a contractionary phase, the report cautions that there are still no signs of sustained growth.
Highlights
The value of exports from Latin America and the Caribbean grew by an estimated 4.1 percent in 2024, following a 1.6 percent decline in 2023.
This increase was largely due to an export recovery in South America, where volumes surged. Exports also rebounded in the Caribbean, while growth in Mexico accelerated slightly, bolstered by higher prices. Exports from Central America stagnated.
Although the trade outlook has improved considerably, there are still no signs that the region has returned to a path of sustained trade growth.
The uncertainty currently surrounding global economic growth poses a risk to real demand. Commodity prices are expected to continue on a downward trend, amid an increasingly volatile global environment.
The trade performance of Latin America and the Caribbean (LAC) is showing significant signs of improvement. After nearly a year of contraction, exports returned to growth in 2024, making LAC one of the world’s most dynamic regions in trade terms. The expansion in LAC’s total exports was driven by rising volumes, while prices remained flat. Imports also rebounded, showing modest growth after a sharp decline in 2023.
The recovery in export values was largely underpinned by the increase in export volumes in some South American economies and, to a lesser extent, the Caribbean. Mexico saw a modest acceleration in export growth, driven by better prices while volumes grew slowly. Exports stagnated in Central America, after contracting in 2023.
Looking ahead, there are still no signs of a sustained trade recovery in the region. The risks to regional trade remain balanced, while projections point to limited growth against a backdrop of considerable uncertainty. Read more.
Conclusions
Following the contraction of 2023, exports from LAC returned to growth in the first half of 2024, expanding at rates that remained relatively stable throughout the year. The region’s export values are estimated to have increased by 4.1percent in 2024.
The driving force behind this recovery was South America, where export volumes surged following the drought-induced negative performance of 2023 and extractive industry production increased. Although flat prices continued to hold export values back, the pace of decline eased compared to 2023. Increased export values to nontraditional markets in Asia, the Middle East, and Africa accounted for most of this growth, followed by the United States and the European Union. Conversely, shipments to China and intraregional trade contracted.
After the contraction of 2023, the Caribbean’s exports recovered dramatically, although this performance was entirely driven by Guyana’s soaring oil exports. External sales remained on negative ground in the rest of the subregion, except Belize.
Mexico remained the driving force behind exports from LAC. Growth in the country’s export values accelerated on the back of higher prices, while volumes grew slowly. Increased sales to the United States were the main factor underpinning this performance.
Central America export values stagnated in 2024, after contracting in 2023. This result was due to the fall in shipments to Asia—particularly China—and Europe, which was offset by gains in exports to the United States and the rest of LAC.
Looking ahead, the region is expected to see moderate trade growth amid a context of great uncertainty, while the risk outlook is balanced.
Global economic growth is expected to remain steady, but the region’s recent recovery will likely be constrained by the downturn in China, sluggish activity in Europe and Latin America, and weaker average external demand than in previous periods.
Commodity prices have entered a downward phase in the cycle and are expected to decline further in the coming quarters.
Climate change represents a significant risk to the region’s export capacity. Extreme weather events threaten to compromise agricultural production and transportation infrastructure, as evidenced by the recent floods in Brazil and the drought affecting the Panama Canal.
Geopolitical conflicts that include the ongoing war in Ukraine and rising tensions in the Middle East could disrupt global supply chains, increase costs, and dampen economic growth.
Meanwhile, trade restrictions, proactive industrial policies, and the risk of further fragmentation of the global trading system contribute to the prevailing climate of uncertainty.
In summary, while the region’s exports have moved beyond the contractionary phase, signs of a sustained recovery remain elusive. In this context, LAC should prioritize reforms and investments that boost productivity, with a focus on supporting exports and facilitating investment to ensure that international trade remains a driver of economic growth in the region.
Trade-Trends-Estimates-Latin-America-and-the-Caribbean.-2025-Edition (1)
The post Exports from Latin America and the Caribbean grew amid uncertainty appeared first on Caribbean News Global.
