NEW YORK (Reuters) – The World Bank on Wednesday raised its growth view for the economies of Latin America and the Caribbean (LAC) from 1.4% to 2.0% in 2023 even as economic growth in the region remains the slowest in the world.
The World Bank report said significant deficits across the region limit investments needed to reach the area’s growth potential.
Adding digital connectivity to a host of policies can help “create more dynamic and inclusive societies” even as economic growth in LAC continues to be too slow to reduce poverty and create enough jobs, said the World Bank in a report.
“There’s potential for doing what we do in a different way,” said William Maloney, Latin America and the Caribbean chief economist at the World Bank.
“With more sophisticated agricultural extension, you can reach many more people, you can introduce smart agricultural policies … so you can imagine making our existing sectors more clean, more productive.”
The debt-to-output ratio has fallen to 64% from 67% a year ago, but remains above 57% in 2019. With interest rates climbing in developed markets and growing expectations they will remain higher for some time, the ratio points to a growing cost of servicing that debt.
“High interest rates on the debt have made fiscal consolidation difficult,” Maloney said in a press conference. “Most of our countries remain with substantial deficits.”
(Reporting by Rodrigo Campos; Editing by Chris Reese)
