REGIONAL REPORT
Central bank communication remains instrumental to the success of the disinflation effort ,” added Mr . Valdes .
Fiscal policy , said the IMF , should focus on rebuilding policy space to ensure fiscal sustainability and boost resilience against future shocks , while protecting key social spending needs . Despite a generally timely withdrawal of the pandemic fiscal support , public debt remains high and is projected to remain above that of their peers by 2028 . Most countries in the region have plans to strengthen public finances and further reduce debt over the medium term , but this will require significant efforts and discipline . The pace of fiscal consolidation should weigh the strength of economic activity and the evolution of debt-servicing costs .
The International Monetary Fund ( IMF ) predicts economic growth in Latin America and the Caribbean ( LAC ) to moderate from 4.1 per cent in 2022 to 2.3 per cent in 2023
Growth prospects
“ Over the medium term , prospects for strong growth across Latin America remain subdued . While globally , emerging market and developing economies are projected to see 4.4 per cent average growth , the region ’ s GDP is expected to expand annually at about 2½ per cent , similar to its pre-pandemic historical average . Boosting sustainable and inclusive growth requires addressing long-standing structural challenges , adapting to new ones and enhancing social cohesion ,” said the IMF in its report . Mr . Valdes pointed to the following priorities : “ Addressing long-lasting challenges includes tackling lacklustre productivity , low investment and labour market rigidities . Enhancing trade , including within the region , can also bring significant opportunities for growth . Bolstering sustainable growth will also require adapting to the changing global landscape . The energy transition offers an opportunity for mineral-rich countries in the region , but they will need adequate investment frameworks to attract the needed capital . Meanwhile , the adoption of new digital technologies calls for greater efforts to improve the quality of education ,” he said .
“ Despite progress in the past decades , poverty and inequality remain high in the region . Strengthening social cohesion should be a centrepiece of any policy plan and reform agenda , and this will require strengthening social protection mechanisms and tackling insecurity ,” he concluded .
Using trade to boost growth
Better infrastructure and logistics can help the region to increase trade and growth , said Flavien Moreau and Rafael Machado Parente of the IMF on 16 November 2023 .
“ Most countries in Latin America and the Caribbean aren ’ t fully harnessing the potential of international trade , an important driver of growth for emerging market economies . While the region has made some progress on trade openness , it continues to be held back due largely to poor infrastructure , burdensome customs clearance procedures , as well as relatively high tariff and non-tariff barriers to trade . One important measure for trade openness , the sum of exports and imports of goods and services , stands at just 47 per cent of gross
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