The International Monetary Fund (IMF) warned that Latin America faces a disappointing growth trajectory, which is moderating and that means it needs to focus on reforms to improve that growth trajectory, related to less bureaucracy and better governance.
“We have been discussing the key reforms, the reforms that countries can carry out to improve growth. I also want to recognize that Latin America is not a unified place, because if you look at the Caribbean or Central America, they are actually doing better. “Its performance is better than the world average,” he noted.
At a press conference to present the “October 2024 Global Policy Agenda”, the head of the IMF specified that if Latin America and the Caribbean as a whole are considered, the rate is much lower, with a growth of 2.1% in 2024 than It is not enough to improve the performance of Latin American economies, “that is why this issue of reforms that promote growth is so important,” he said.
However, he noted, Central America is having better results and it is because the countries have taken seriously the need to reduce debt, as is the case of Barbados or Jamaica, where the reforms are giving results, “and because they have taken into account seriously the importance of governance and involving the public in the implementation of reforms.”
Within the framework of the Annual Meetings of the IMF and the World Bank, Georgieva assured that it is essential that countries implement reforms that favor growth, from reducing bureaucracy to improving governance, “we have seen that the reforms have “Been a source of important benefits in all countries, our analysis shows that these reforms can boost production by up to 8% in four years in developing countries.”
The managing director of the IMF warned that at the international level, it is necessary to guarantee that inflation returns to its target level and although the main central banks, including the United States, have successfully embarked on a path of flexibility, now the key is in finishing reducing inflation without unnecessarily damaging the labor market.
He added that it is also time to act on debt and deficit, since after years of much-needed fiscal support in response to shocks, it is time to rebuild “fiscal buffers” and in most countries, that can be done. do gradually, but you have to start now.
“As we face these challenges, it is also essential that we continue to cooperate on climate, technology, debt and trade. Climate change and technology are triggering transformations in the global economy that require a global response. Only by working together can we take advantage of the opportunities and mitigate the risks of these great changes,” said Kristalina Georgieva.
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