(Bloomberg) -- Latin America’s economic growth this year will be lower than previously expected as a regional crime wave and aging populations compound woes from a tough global outlook, according to the World Bank.

The region will expand 1.6% in 2024, down from September’s estimate of 2.3%, according the Latin America and Caribbean Economic Review published Wednesday. Latin America lags other regions even after overcoming most of the harshest impacts of the pandemic while reducing inflation and unemployment.

China, the region’s main trade partner, is posting “unpredictable” and “sluggish” growth, and global commodity prices are expected to dip this year, weighing on activity across the region. This is true even for economies like Mexico, which has benefited from companies setting up operations to serve North American clients in a practice known as near-shoring.

“Not only has Latin America and the Caribbean grown less than other emerging markets and developing economies but the rate at which the region has grown has slowed during the last decade,” World Bank members wrote.

At the same time, violence has become “more severe and widespread” according to the bank, impacting both citizens and investments. Latin America’s homicide rate is four times higher than the global average, and it’s the only region in the world where that figure is rising. Examples include an upswing of gang violence in Ecuador, where a presidential candidate was assassinated last year, and also Haiti, where ex-President Jovenel Moise was killed in 2021.

“Latin American and the Caribbean countries are more violent than their GDP per capita or their poverty rates would predict, suggesting that the high levels of violence are not explained by the development stage,” the report said. 

The World Bank, the Inter-American Development Bank and the Development Bank of Latin America and the Caribbean are working to better understand violence across the region.

Read more: Bukele’s Brutal Crime Crackdown Gets Mimicked in Latin America

Elderly Populations

Complicating matters further, the region is approaching a demographic turning point. Unemployment is falling in most countries, but the labor participation rate of seniors and low-skilled workers lags other groups. 

The bank estimates that by 2047 there will be more old-age dependents than children in the average household.

Care for the elderly will add new burdens on indebted families, with women more likely to leave the workforce to look after senior citizens. Pressure on retirement systems will also test fiscal stability efforts.

There’s a “substantial agenda of reforms” in infrastructure, education and competition which “has been put off for decades,” the report says.

On the upside, Latin America is getting relief from inflation rates that are seen easing back near central bank targets later this year. The region is reaping the benefits of early and aggressive tightening cycles in the wake of the pandemic.

The catch is while most countries are lowering interest rates, borrowing costs are likely to remain restrictive, thus posing the need to monitor the impacts on households and firms.

“There is unlikely to be a return to the era of easy money and low interest rates,” World Bank members wrote.

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