Latin America and the Caribbean is a region full of opportunities, with endless stories of strength and creativity, a region that does not stand still, that transforms itself in the face of adversity. The World Bank works with governments, the private sector and civil society for education, inclusion and resilience in the face of climate change to end poverty on a livable planet.
In the past year, the region managed to weather relatively well the challenges it faced in the context of COVID-19 including rising inflation pressures, global economic uncertainty and rising debt; even poverty and employment returned to pre-pandemic levels.
The growth outlook for 2023 is 2 percent. It has shifted slightly upward from the low levels seen in May. But headwinds persist and may become more pronounced. The growth forecast for 2024 is 2.3 percent, indicating that the region has regressed to the low levels of pre-pandemic growth.
The region will also suffer from the global adverse effects, such as lower commodity prices, rising interest rates in the Group of Seven (G7) countries, and China's shaky recovery.
Household income losses due to the pandemic have not fully recovered, especially for the middle class. The average poverty rate now stands above pre-pandemic levels at 30.3 percent.
Overall, employment has returned to 2019 levels, including for women, but real wages remain stagnant and often below 2019 levels. Lower-educated workers and older adults are lagging the furthest behind in the recovery, while informality has remained mostly stable since 2019.
In education, since the start of the pandemic, students on average have lost two-thirds of face-to-face school days, either partially or completely. This equates to an estimated loss of 1.5 years of learning, and most affects the youngest and most vulnerable, who risk losing 12 percent of their total lifetime earnings.
The region is currently experiencing the worst migration crisis in its history. In addition to the traditional flows from Central America and Mexico to the United States, Venezuela and Haiti have recently experienced significant outflows. Some 7.5 million Venezuelans have left their country since 2015, while 1.7 million Haitians are abroad, adding to the two million internally displaced.
This situation is exacerbated by the increasingly severe effects of climate change, which have already caused significant economic and social losses. Hurricanes, floods and droughts are becoming more frequent, and it is estimated that 17 million people could be forced to flee their homes. Moreover, nearly 5.8 million Latin Americans and Caribbeans could fall into extreme poverty by 2030, largely due to a lack of safe drinking water, as well as increased exposure to excessive heat and flooding.
Green growth opportunities in the form of renewable electricity - solar, wind and geothermal - and vast natural capital - water, trees, biodiversity - represent the potential for new industries in the region. Other opportunities arise from long-term policies, such as reducing systemic risks, promoting investments in traditional and digital infrastructure, and improving human capital.
The pandemic accelerated digitalization, but the full potential of the region's wiring for growth, inclusion and service delivery remains untapped. Progress has been made in expanding basic mobile Internet connectivity, with a coverage gap of only 7 percent of the population, while two-thirds of households have fixed Internet connections. Even so, low quality of service remains a major problem and disparities persist, with 74 percent of urban households having access to fixed Internet, but only 42 percent in rural areas. This requires a combination of technological and institutional innovations as affordability issues need to be addressed, as well as the lack of digital skills and raising awareness of the potential benefits of connectivity.
Last Updated: Oct 05, 2023