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World Bank increased Latin America’s economic growth forecast for the year 2023.

The World Bank’s most recent report, Wired: Digital Connectivity for Inclusion and Growth, shows that Latin America and the Caribbean made progress in macroeconomic resilience during the previous decades, including post-pandemic factors, uncertainty due to the war in Ukraine, low commodity prices and growing debt.

The paper also explained that this growth is not sufficient for poverty reduction and job creation, while fiscal constraints limit needed investments.

Expanding digital connectivity, combined with complementary policies, offers the potential to create more dynamic and inclusive societies, according to the report.

World Bank projections show regional GDP growing by 2 % in 2023, slightly above the 1.4 % of previous projections.

Rates of 2.3% and 2.6% are expected for 2024 and 2025. These rates are not sufficient to achieve much-needed progress in inclusion and poverty reduction.

Poverty and employment have generally returned to pre-pandemic levels, and inflation, with the exception of Argentina and Venezuela, has fallen to a regional average of 4.4%, below that of OECD countries. Although better than six months ago, the global backdrop remains adverse.

Governments will also continue to struggle with fiscal space. While the debt-to-GDP ratio is estimated at 64%, down from 67% a year ago, it is still above the 2019 level of 57% and high interest rates have increased the debt service burden.

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