"Global economy trends in nearshoring, green industry can help boost growth in Latin America and the Caribbean"

" Global economy trends in n earshoring, green industry can help boost growth in Latin America and the Caribbean \r\n\r\nLatin America and the Caribbean economies have proven relatively resilient in the wake of increasing\u00a0debt stress, inflation and rising global uncertainty. But new headwinds in the form of lower\u00a0commodity prices,\u00a0higher interest rates in developed countries and China\u2019s unsteady recovery could potentially turn the region\u2019s prospects bleak.\r\n\r\nIn order to boost much needed growth, countries should preserve their hard-won resilience and seize the unique opportunities global economy trends offer in nearshoring - moving production closer to home markets, and the green industry, according to a new World Bank report, \u201c The Promise of Integration, Opportunities in a Changing Global Economy \u201d.\r\n\r\nThe report estimates regional GDP will grow by 1.4 percent in 2023, a lower-than-expected rate. Rates of 2.4 percent are expected for 2024 and 2025, too low to make significant progress in poverty reduction.\r\n\r\n\u201c The region has largely recovered from the pandemic crisis but unfortunately is back to the low growth levels of the previous decade, \u201d said\u00a0 Carlos Felipe Jaramillo, World Bank Vice President for Latin America and the Caribbean . \u201c Countries need to urgently accelerate inclusive growth, so that everyone benefits from development, and this will require maintaining macroeconomic stability and taking advantage of the opportunities trade integration offers today. \u201d\r\n\r\nAfter recovering from the pandemic, the region has managed with relative success the multiple crises caused by the Russian war in Ukraine and the uncertainties surrounding the global economy. Both poverty and employment are mostly back to pre-pandemic levels, while average inflation, excluding Argentina, is expected to decline to 5.0 percent in 2023 after reaching 7.9 percent in 2022.\r\n\r\nAccording to the report, the region\u00b4s overall resilience is the result of hard-won progress in macroeconomic management over the past two decades. Preserving this progress will be paramount.\r\n\r\nHowever, on average, fiscal imbalances remain high, expected at 2.7 percent of GDP in 2023, further eroding already tight fiscal space, and debt levels are estimated to reach 64.7 percent of GDP this year, slightly down from 66.3 percent in 2022. Furthermore, the recent bank failures in the US and Europe introduce additional uncertainty. Its resonance in LAC\u00b4s banking system and capital flows remains to be seen.\r\n\r\n\u201c The LAC region remains one of the least integrated, while trade openness and FDI flows have mostly been stagnant or decreasing over the past 20 years; \u00a0countries should find ways to gain attractiveness and take advantage of the nearshoring trends, \u201d said\u00a0 William Maloney, chief economist for Latin America and the Caribbean at the World Bank .\u00a0 \u201c In addition, leveraging the region\u2019s extraordinary comparative advantage in sustainable energy production, commodities necessary for emerging green industries, and the region\u2019s unique natural capital offers a new potential source of growth, but will require policies to facilitate access to global markets, capital, and technology. \u201d\r\n\r\nThe report suggests a series of integration advancing policies countries should consider to seize these opportunities. This includes long term policies such as reducing systemic risks, boosting traditional and digital infrastructure investments, and improving human capital, as well as short-term options such as preserving macro stability, promoting customs and transport regulatory advances, and improving export and investment promotion agencies."

"Global economy trends in nearshoring, green industry can help boost growth in Latin America and the Caribbean"

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