Unemployment in Latin America and the Caribbean fell in 2023 to its lowest level since 2014, the International Labour Organization (ILO) reported on Tuesday, but an expected economic slowdown in 2024 could reverse the recent post-pandemic gains.
In a new report, the ILO predicts that unemployment in 2023 will be 6.3%, down from last year’s 7.2% and a significant recovery from the 10.6% unemployment rate in 2020, when COVID-19 lockdowns left millions of people without work.
The regional unemployment rate was the lowest since 2014, when unemployment stood at 6.0%, according to previous ILO reports.
The UN agency said that the average unemployment rate in the first three quarters of this year was 6.5%. “When including the seasonal effects of the regional labor market,” the unemployment rate throughout 2023 is estimated at 6.3%, noted the ILO.
An economic slowdown next year could increase unemployment, warned the agency, citing predictions from the International Monetary Fund (IMF) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) that foresee a decrease in growth.
ECLAC predicts that the region’s economies will grow only 1.9% next year, below the 2.2% growth forecast for 2023.
“This would mark a second consecutive year of slow economic activity for Latin America and the Caribbean, resembling the situation the region experienced in the years prior to the pandemic,” the ILO report stated.
In this context, it is “likely” that the regional unemployment rate for 2024 will be between 6.5% and 6.8%, according to the report.
If this slowdown is accompanied by lower inflation, employment growth could still continue, said the ILO, a scenario that would favor the creation of informal jobs without the benefits of formal employment.