Publication: Fiscal Adjustment in Latin America and the Caribbean: Short-Run Pain, Long-Run Gain?
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Published
2018-04-17
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2018-04-12
Author(s)
Friedheim, Diego
Morano, Luis
Camarena, José Andrée
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Abstract
After a growth slowdown that lasted six years, the Latin America and the Caribbean (LAC) region has finally turned the corner and resumed growth at a modest rate of 1.1 percent in 2017 and 1.8 percent expected in 2018. This reflects a more favorable external environment, particularly a recovery in commodity prices. In spite of the benign external environment, most LAC countries still face a fragile fiscal situation. While gradual fiscal adjustments have started in several countries, most countries are still running fiscal deficits and debt levels are high. Further fiscal consolidation is needed to preserve the substantial gains achieved by the region in recent times, in terms of lower inflation, less poverty and inequality, and inclusive growth. This Semiannual Report analyzes the complex decisions regarding fiscal adjustment policies.
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“Vegh, Carlos A.; Riera-Crichton, Daniel; Friedheim, Diego; Morano, Luis; Camarena, José Andrée; Vuletin, Guillermo. 2018. Fiscal Adjustment in Latin America and the Caribbean: Short-Run Pain, Long-Run Gain?. LAC Semiannual Report;April 2018. © World Bank. http://hdl.handle.net/10986/29666 License: CC BY 3.0 IGO.”
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