The Inter-American Development Bank (IDB) said that 2013 was marked by an external context that did not encourage a strong economic performance in Latin America and the Caribbean.
In a statement, the bank said the high degree of volatility that rattled international financial markets and the fall in prices for basic goods took a toll on the region’s GDP growth, which averaged 2.7 per cent. In 2014, the growth forecast for the economies of Latin America and the Caribbean as a whole is three per cent.
“A less favourable external environment, along with weak external demand over the mid-term and latent risks in international financial markets, will require the region to accelerate growth without depending on the external conditions that helped us in the past decade,” IDB President Luis Alberto Moreno said in his year-end report to the bank’s board of executive directors.
“Therefore, our priority is to increase potential output over the medium-term through reforms, focusing on bottlenecks that are restricting growth in productivity, internal savings and investment,” Moreno added.
As an example, Moreno cited the need to improve the quality of education, as seen recently in the region’s performance in the PISA, an international educational evaluation tool. In the 2013 PISA test, Latin American youths did not perform nearly as well as students from other regions of the world. Moreno added that Latin America and the Caribbean need to invest more in infrastructure, given the gap that exists in that area between the region and the world’s richest and most dynamic countries. Besides modernising their highways, ports and airports, the countries of Latin America and the Caribbean must improve infrastructure and logistical services in order to lower transaction costs and make their industries more competitive.
The IDB in 2013
According to preliminary data, in 2013, the IDB approved 167 financing packages worth some US$14 billion, a figure surpassed only by that of 2009, when the bank’s financing hit a US$15.9 billion in response to the global economic crisis. As for resources, new operations centred on high-priority sectors such as institutional development (37 per cent), infrastructure and the environment (33 per cent), social welfare programmes (21 per cent) and regional integration and overseas trade (nine per cent). Among the loans and guarantees approved by the IDB in 2013, private-sector operations (without a sovereign guarantee) totalled US$2.1 billion.
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