The economy of Latin America and the Caribbean will grow 2% this year compared to the projected 1.4%, an increase that is still not enough to put the region at the level of the rest, the World Bank reported in a report published this Wednesday, which recommended investments in digital connectivity to stimulate development.
With this new forecast, the multinational organization revised upwards the initial forecast of 1.7% made at the beginning of 2023, which it later lowered to 1.4% last April. Current estimates also exceed 1.7% expected for the region by the Economic Commission for Latin America and the Caribbean, last month.
Although the area achieved “important advances in macroeconomic resilience” and “went through the multiple crises of the post-pandemic with relative success,” the growth forecast for this year continues “to be insufficient to reduce poverty and create jobs,” the Bank report indicated. World Cup to which the The Vermilion.
Poverty and employment in the region “returned to their pre-crisis levels, and inflation, excluding Argentina and Venezuela, has fallen to a regional average of 4.4%.”
The World Bank also forecasts rates of 2.3 and 2.6 percent for 2024 and 2025, similar to those of the 2010s, but still “insufficient to achieve much-needed progress on inclusion and poverty reduction.”
The multinational organization insisted that the global context continues to be “adverse” due to high interest rates and the “uncertain prospects for China,” and affirms that although the debt-to-regional GDP ratio is estimated at 64%, a decrease compared to 67% in 2022, it is still above 57% in 2019.
“The region has proven to be largely resilient to the various external shocks following the pandemic, but unfortunately growth remains anemic,” warned World Bank Vice President for Latin America and the Caribbean, Carlos Felipe Jaramillo.
Digital solution to stimulate development
According to Jaramillo, “countries must urgently find ways to drive inclusion and growth”, solutions that could partly fall on digital solutions.
“Public and private investment in digital connectivity can stimulate new sectors and jobs, offer new areas of commerce and increase the efficiency, quality and inclusion of government programs ranging from education to agricultural extension in remote rural areas,” stated for his part the chief economist for Latin America and the Caribbean of the World Bank, William Maloney.
Maloney stressed that the World Bank sees here “a great opportunity for the region,” although he clarified that this is not “a magic formula for growth” as it could bring to light existing social inequalities “if complementary investments are not made in skills, finance and regulatory systems to realize the promise of digital technologies for all.”
The organization recognized that there are still gaps to be bridged in this regard, among them the still insufficient infrastructure, the lack of internet coverage in rural areas, and the high cost of connection, which affects access for vulnerable sectors.
The economic organization recommended taking advantage of existing opportunities in the region that can be used to improve governance, including the development and better use of digital tools that facilitate transactions and improve the efficiency of service provision.