Challenging times for biofuel firms in South America

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Slowing growth forecasts for South American economies look set to present a sustained challenge to biofuel investors and developers in the region, not least in Brazil where a weakening of Government resolve on biodiesel blending rates has angered producers.
After reporting an estimated 6.7% growth ‘rebound’ in Latin America and the Caribbean (LAC) in 2021, the World Bank’s latest Global Economic Prospects (GEP) publication projects a slowing of LAC growth to 2.6% this year and 2.7% in 2023.
With the region having benefitted last year from rapid progress on Covid vaccinations and a sharp drop in new cases, the Bank’s downbeat forecast for the next two years is a contrasting reflection of a “sluggish labour market, a tightening of macroeconomic policies, and softer external demand”.
“Growth during the forecast horizon will not be sufficiently robust to reverse the region’s long-standing decline in per capita income relative to advanced economies,” concluded the World Bank in its mid-January GEP document.
“Downside risks to the forecast include renewed surges in COVID-19 cases; financial stress; disruptions related to natural...

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