Regional growth will be led by Dominican Republic (6.0%), Panama (5.9%), Nicaragua and Bolivia (4.5%), and Costa Rica (4.3%) at the end of the year, according to the Economic Commission for Latin America and the Caribbean.
ECLAC released its economic survey of Latin America and the Caribbean 2016, which stresses the urgency of mobilizing investment – public and private – to promote the region’s economic recovery and meet the challenges imposed by the 2030 Agenda for Sustainable Development.
“The capacity of those countries to accelerate economic growth depends on the ability to adopt policies that support investment. These policies must be accompanied by efforts to change the conversation between the public sector and private companies. Increasing productivity is also a key challenge to move forward on the path of dynamic growth and stability,” said Alicia Barcena, Executive Secretary of ECLAC in Santiago, Chile, during the press conference about the study presented today.
Central America is in one of the best situations on the whole continent because it will grow 3.8%, thanks to the stimulus derived from an improvement in terms of trade, a lower price for the production of hydrocarbons, the recovery of their internal and external demand, and an increase in income from remittances.
On the other hand, in general terms, the countries of Latin America and the Caribbean show a contraction in growth rate of -0.8% in 2016, an even greater fall than what was observed in 2015 (-0.5%), with a very heterogeneous behavior among countries and subregions.
Externally, the world economy will maintain low levels of growth. This will be accompanied by a slow expansion of trade, which has failed to regain the levels seen before the global financial crisis, according to the report.
The ECLAC urges that a return to the path of growth is necessary to mobilize financial flows and finance development.
This requires changing the tax structures of countries to improve collection and progressiveness, strengthen income tax – for both individuals and companies, – and combat evasion, which reached 6.7 points of regional GDP in 2015, with a total estimated amount of $340 billion.
It is also necessary to promote renewed political- and public-private coalitions that create adequate incentives to channel funding towards the objectives of development.
Financial inclusion as a policy of productive insertion through the creation of markets and new innovative instruments should also be enhanced.