The WB asks Latin America to take advantage of relocation and green energy

“The region has largely recovered from the pandemic crisis, but has unfortunately returned to the low growth levels of the previous decade,” he said. Carlos Felipe Jaramillovice president of world Bank for Latin America and the Caribbean.

“Countries urgently need to accelerate the inclusive growth“, he added.

Two decades of advances in macroeconomic management have endowed LAC with overall economic resilience, with the debt-to-output ratio seen declining to 64.7% of GDP from 66.3% last year, against a backdrop of of higher financing costs worldwide.

Poverty levels have fallen and employment has risen to the point where both have largely returned to pre-pandemic conditions. It is expected that the inflationexcluding Argentina, descend to the 5% this year since 7.9% of 2022.

But the region is also spending beyond its means, and fiscal imbalances are expected to reach 2.7% of output this year.

For years, LAC has offered investors a difficult environment, with rapidly changing regulations, high transportation costs, and an unevenly educated workforce, meaning Canada, the United Kingdom, and sometimes the United States are more attractive than regional giants Brazil and Mexico.

The factors add to investor concerns about local costs of capital, real estate and taxes, according to the World Bank.

“The Latin American and Caribbean region remains one of the least integrated, while trade openness and (foreign direct investment) flows have either stagnated or reduced over the last 20 years,” said William Maloney, chief economist for Latin America and the Caribbean of the World Bank.

“Countries must find ways to become attractive and take advantage of near relocation trends,” he said, while taking advantage of the region’s sustainable energy production and green transition raw materials.