The organization identifies key challenges for the region, such as the fiscal situation, with high public spending and high interest rates.
He world Bank (WB) issued a report this Wednesday that indicates higher-than-expected economic growth for Latin America in 2023. However, although a regional GDP expansion of 2% is anticipated, still considered insufficient to address the challenges of poverty and social inclusion.
This forecast represents an improvement over the previous estimate from June, which placed growth at 1.4%. However, it is still below the growth observed in other regions of the world, according to the organization.
William Maloneychief economist for the Latin America and Caribbean region of the World Bank, attributes this improvement to growth most significant experience by the great powers of the G7.
Argentina: what the World Bank said
In terms of country breakdown, Argentina and Chile are expected to experience economic contractions of -2.5% and -0.4%, respectively, during this year. In contrast, the Gross Domestic Product (GDP) of Peru is anticipated to grow by 0.8%, that of Mexico by 3.2% and Colombia by 1.5%.
The report highlights that, despite some economic setbacks in certain countries, in generalthe region has implemented effective macroeconomic reforms in the last three decades. These reforms have helped manage inflationary pressures, uncertainties derived from conflicts such as the war in Ukraine, low raw material prices, and growing post-pandemic debt. Excluding Argentina and Venezuela, poverty and employment have returned to pre-crisis levels, and inflation has decreased to a regional average of 4.4%.
The World Bank identifies key challenges for the region, such as the fiscal situation, with high public spending and high interest rates, which limits debt reduction. Despite a decrease in debt relative to GDP, which fell to 64% from 67% in the last year, it still remains above the 2019 level, which was 57%.
Two of the main challenges facing Latin America, according to economist Maloney, are the low attraction of foreign capital and the low productivity in the region. These factors continue to be major obstacles to sustainable and meaningful economic growth in the region.
Source: Ambito
