The World Bank Tuesday said that Latin America and the Caribbean (LAC) continues its efforts to reignite growth and create more and better jobs, but progress remains constrained.
The Washington based financial institution said that the regional growth rate is expected to edge up slightly, from 2.2 percent in 2024 to 2.3 per cent this year, even as many individual economies face downward revisions in their projections
It said that these adjustments reflect, in part, an external environment that offers limited support, shaped by a cooling global economy, falling commodity prices, and greater uncertainty.
According to the World Bank, monetary authorities in the region continue to manage inflation competently, but the ‘last mile’ is proving longer and rockier than expected.
It said interest rates in advanced economies have slowed their decline, constraining interest rate reductions across the region, and delaying the needed relief for households, banks, and governments’ fiscal accounts. Investment, both public and private, remains depressed, and any momentum for ‘nearshoring’- the practice of bringing offshore operations to close or friendly countries-is stalled, both because of the rise in global uncertainty and because of a lack of preparedness in the region’s enabling environment to attract and host it.