The World Bank's most recent report, Wired: Digital
Connectivity for Inclusion and Growth, shows that Latin America and the
Caribbean made progress in macroeconomic resilience during the previous
decades, including post-pandemic factors, uncertainty due to the war in
Ukraine, low commodity prices and growing debt.
The paper also explained that this growth is not sufficient
for poverty reduction and job creation, while fiscal constraints limit needed
investments.
Expanding digital connectivity, combined with complementary
policies, offers the potential to create more dynamic and inclusive societies,
according to the report.
World Bank projections show regional GDP growing by 2 % in
2023, slightly above the 1.4 % of previous projections.
Rates of 2.3% and 2.6% are expected for 2024 and 2025. These
rates are not sufficient to achieve much-needed progress in inclusion and
poverty reduction.
Poverty and employment have generally returned to
pre-pandemic levels, and inflation, with the exception of Argentina and
Venezuela, has fallen to a regional average of 4.4%, below that of OECD
countries. Although better than six months ago, the global backdrop remains
adverse.
Governments will also continue to struggle with fiscal
space. While the debt-to-GDP ratio is estimated at 64%, down from 67% a year
ago, it is still above the 2019 level of 57% and high interest rates have
increased the debt service burden.
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