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From Recovery to Renaissance: Turning Crisis into Opportunity

From Recovery to Renaissance
Turning Crisis into Opportunity

Coordinated by

  • Eduardo Cavallo, Arturo Galindo, Victoria Nuguer and Andrew Powell
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Highlights
  • Economic growth in Latin America and the Caribbean was stronger than expected in 2021 but waned at the start of 2022. The surge in commodity prices due to the war between Russia and Ukraine will provide a boost to exporters, while imposing significant costs on commodity importers and pushing up inflation across countries.
  • The ongoing conflict, together with policy normalization in advanced economies, carries significant risks for the region. Volatility in financial markets could depress investment and bring down growth further. Policymakers need to take urgent measures to mitigate risk and boost inclusive growth. As minor fixes are unlikely to result in notable benefits, governments should consider more ambitious resets of policy frameworks.
  • This report analyzes growth prospects, fiscal and monetary policy, and the outlook for the external sector. The recommendations stress the need for a new fiscal and labor market architecture. Policymakers should seize the window of opportunity provided by the crisis to improve the outlook for the region.
Tackling Informality for Fiscal Health in the Post-Pandemic Period
Tackling Informality for Fiscal Health in the Post-Pandemic Period

Ideas Matter - Eduardo Cavallo

From Pandemic to Inflation and War: Challenges for Policymakers in Latin America and the Caribbean
From Pandemic to Inflation and War: Challenges for Policymakers in Latin America and the Caribbean

Ideas Matter - Eduardo Cavallo - Arturo Galindo - Victoria Nuguer - Andrew Powell

Events
Apr 08 2022
Presentation of the 2022 Latin American and Caribbean Macroeconomic Report: From Recovery to Renaissance: Turning Crisis into Opportunity
Inter-American Development Bank | Washington, D.C. | United States of America

More details here

Economic growth in Latin America and the Caribbean was stronger than expected in 2021 but waned at the start of 2022. The surge in commodity prices due to the war between Russia and Ukraine will provide a boost to exporters, while imposing significant costs on commodity importers and pushing up inflation across countries. The ongoing conflict, together with policy normalization in advanced economies, carries significant risks for the region. Volatility in financial markets could depress investment and bring down growth further. Policymakers need to take urgent measures to mitigate risk and boost inclusive growth. As minor fixes are unlikely to result in notable benefits, governments should consider more ambitious resets of policy frameworks. This report analyzes growth prospects, fiscal and monetary policy, and the outlook for the external sector. The recommendations stress the need for a new fiscal and labor market architecture. Policymakers should seize the window of opportunity provided by the crisis to improve the outlook for the region..

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124 pages
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DOI
  • http://dx.doi.org/10.18235/0004180
Previous editions
From Recovery to Renaissance: Turning Crisis into Opportunity

2021 Latin American and Caribbean Macroeconomic Report

From Recovery to Renaissance: Turning Crisis into Opportunity

The year 2020 will be remembered as one of the most challenging in modern history. Latin America and the Caribbean lost 7.4% of GDP, the largest drop on record in a single year. The region is expected to recover in 2021 but faces a hazardous time ahead. Most countries will require some type of adjustment to maintain fiscal sustainability.

Policies to Fight the Pandemic

2020 Latin American and Caribbean Macroeconomic Report

Policies to Fight the Pandemic

The novel coronavirus is taking a huge toll across the world, and governments in Latin America and the Caribbean are right to take aggressive measures to save lives. Within a matter of weeks, the macroeconomic outlook for the region has changed dramatically. Financing costs have risen, commodities fallen, and large losses of GDP now seem unavoidable.

Building Opportunities for Growth in a Challenging World

2019 Latin American and Caribbean Macroeconomic Report

Building Opportunities for Growth in a Challenging World

This report analyzes the potential consequences for the region of selected negative external shocks. It considers how countries can strengthen macroeconomic policy frameworks to mitigate these events and the monetary, fiscal, and debt management policy choices available. However, it also considers opportunities. More and better-targeted infrastructure investments can enhance growth prospects. And while public investment is constrained by tight budgets, the window of opportunity to pursue private financing to boost investments remains open as interest rates are still relatively low.

2018 Latin American and Caribbean Macroeconomic Report

2018 Latin American and Caribbean Macroeconomic Report

A Mandate to Grow

The 2018 Macroeconomic Report, A Mandate to Grow, revisits the growth debate that has been raging in the region for the past half century. Viewing the debate from this long-term perspective allows for a focus on the structural factors that have prevented Latin America and the Caribbean from reaching the growth potential required to keep pace with faster growing regions and to fulfill the aspirations of its population.

2017 Latin American and Caribbean Macroeconomic Report

2017 Latin American and Caribbean Macroeconomic Report

Routes To Growth In A New Trade World

The 2017 Macroreport considers recent developments in the global economy and how they may affect Latin America and the Caribbean. It reviews how countries are adapting to external conditions and how those policies may be improved. This year, the report focuses particularly on deeper and smarter regional integration as an attractive route to boost productivity and growth.

2016 Latin American and Caribbean Macroeconomic Report

2016 Latin American and Caribbean Macroeconomic Report

Time to Act: Latin America and the Caribbean Facing Strong Challenges

The commodities boom that once buoyed the region’s economies is over, and countries have less fiscal space to undertake counter-cyclical policies than they did during the global financial crisis. This year’s Latin American and Caribbean Macro Report surveys the challenges facing the region in a new economic era and offers guidance on how policymakers can reduce long-term risks in a period of lower growth.

2015 Latin American and Caribbean Macroeconomic Report

2015 Latin American and Caribbean Macroeconomic Report

The Labyrinth: How Can Latin America and the Caribbean Navigate the Global Economy

The 2015 Latin American and Caribbean Macroeconomic Report argues that the region is in the midst of a labyrinth and must navigate several global and domestic obstacles—including lower commodity prices and new types of financial risks—to ensure strong and sustainable growth. The report suggests that many countries must make fiscal adjustments to avoid higher debt without compromising the significant social gains of recent years, and details both the types and speed of policies that may be adopted.

2014 Latin American and Caribbean Macroeconomic Report

2014 Latin American and Caribbean Macroeconomic Report

Global Recovery and Monetary Normalization: Escaping a Chronicle Foretold?

Monetary normalization may be a chronicle foretold, but countries still have the power to influence the outcome for their own economies. This report focuses on the risks Latin American and Caribbean countries face and how they can reduce vulnerabilities and enhance opportunities.

2013 Latin American and Caribbean Macroeconomic Report

2013 Latin American and Caribbean Macroeconomic Report

Rethinking Reforms: How Latin America and the Caribbean Can Escape Suppressed World Growth

Global growth projections have waned since last year and growth may be suppressed below potential for several years to come. Lower global growth will, all things being equal, imply lower growth in Latin America and the Caribbean. At the same time, clear limits to the potential use of monetary and fiscal policy measures pose another constraint. Consequently, countries should consider further structural reform measures to enhance economic prospects and to escape suppressed global growth.

2012 Latin American and Caribbean Macroeconomic Report

2012 Latin American and Caribbean Macroeconomic Report

The World of Forking Paths: Latin America and the Caribbean Facing Global Economic Risks

This report details the divergent paths that the world economy may take and their potential effects on Latin America and the Caribbean. Scenarios are constructed employing a modeling exercise that captures the trade, financial and other linkages between the region and the rest of the world. While vulnerabilities remain and external shocks have been and remain critical, the region enjoys many strengths and has developed a growing arsenal of policy tools. What is the balance of vulnerabilities versus strengths? How can countries address the existing vulnerabilities?

Meet the Editors
Eduardo Cavallo

Eduardo Cavallo

Eduardo Cavallo is Principal Economist at the Research Department of the Inter-American Development Bank (IDB) in Washington DC. Eduardo’s research interests are in the fields of international finance and macroeconomics with a focus on Latin America.

Arturo Galindo

Arturo Galindo

Arturo José Galindo Andrade is a Principal Economist at the Research Department of the Inter-American Development Bank in Washington DC. Prior to joining the Research Department in 2021 he was a member of the Board of Directors of the Central Bank of Colombia.

Victoria Nuguer

Victoria Nuguer

Victoria Nuguer is a Senior Economist in the Inter-American Development Bank’s Research Department. She holds a Ph.D. from École Polytechnique Fédéral de Lausanne in Switzerland and a bachelor’s degree from the Universidad de Buenos Aires in Argentina.

Andrew Powell

Andrew Powell

Andrew Powell is the Principal Advisor in the Research Department of the Inter-American Development Bank (IDB). Andrew has a PhD from Oxford, was Chief Economist of the Central Bank of Argentina and has published numerous academic papers in leading journals in several areas including commodity markets, banking and international finance.