Background LACER 2023

Economic Review | Latin America and the Caribbean October 2023

Digital Connectivity for Inclusion and Growth

Latin America and the Caribbean achieved significant progress in macroeconomic resilience over the past three decades, providing greater resilience against shocks such as rising inflationary pressures, global uncertainty, increased debt, and low commodity prices, along with the convergence of poverty and employment levels to pre-pandemic levels.

The report estimates that the regional Gross Domestic Product (GDP) will grow by 2percent in 2023, slightly above the previously projected 1.4 percent, but still below that of all other regions in the world. Growth rates of 2.3 percent and 2.6 percent are expected for 2024 and 2025, respectively. These rates, similar to those of the 2010s, are not sufficient to achieve the much-needed advances in inclusion and poverty reduction. Countries must find ways to promote inclusion and growth, improve governance, and generate social consensus. Digital solutions can be part of the answer. Expanding digital connectivity, combined with complementary policies, offers the possibility of creating more dynamic and inclusive societies.

Main Messages

Chapter 1 | Continued Resilience, Sluggish Wage Growth, Low Dynamism

Despite the region's solid macroeconomic management, growth prospects remain at a low level. These are not only a reflection of global conditions or a consequence of the pandemic but also reflect structural issues. Regional growth continues to be hindered by low levels of capital accumulation and productivity growth. Addressing these structural problems, as well as implementing necessary fiscal reforms, are important priorities for the governments of the region.

Chapter 2 | Wiring Latin America and the Caribbean for Growth and Inclusion: The Necessary Big Push

Harnessing the advantages of the digital economy while including the poorest and promoting better governance requires a combination of technological and institutional innovations. It is essential to facilitate access to the Internet, address accessibility issues, and expand digital skills. Other critical areas of action include ensuring the availability of financing, facilitating efficient government protocols, and providing a supportive regulatory framework.

Growth Outlook

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