The war in Ukraine has produced a significant increase in energy costs that will likely delay the fiscal consolidation efforts already put in place by several governments in the region. This supply shock is also likely to fuel inflation and higher interest rates, adding further pressure on governments trying to service their debts. Higher domestic and global inflation has … [Read more...] about The Fiscal Puzzle of the Ukraine War for Latin America and the Caribbean
Promoting private investment -both foreign and domestic – must be the cornerstone of any pro-growth fiscal policy in the post-pandemic period. Governments in Latin America and the Caribbean (LAC) must ensure that the design and implementation of such policies – which usually involve the use of tax incentives – protect tax revenues and attract the type of investment that can … [Read more...] about How can tax policy promote investment in the post-pandemic period?
With the outbreak of the pandemic, fiscal balances in Latin America and the Caribbean (LAC) deteriorated and public debt increased significantly. When combined with the expected slowness of economic recovery, this will put significant pressure on the sustainability of public finances for countries in the region. Given this scenario, these countries urgently need to develop and … [Read more...] about Latin American and Caribbean countries must adopt a pro-growth fiscal strategy to avoid falling into a debt trap
The COVID crisis has generated an unprecedented fiscal response as the total resources assigned to attend the pandemic globally has reached $11 trillion, according to the World Economic Forum. Latin America and the Caribbean (LAC) has not been an exception. Taken together, the announced measures in LAC amount, on average, to 8 percent of the region’s GDP as stated by the … [Read more...] about How Fiscal Rules Can Reduce Sovereign Debt Default Risk
The pandemic does not come to the region in good time, the little dynamism of growth in recent years generates uncertainty of the outlook for the future. For 2020, the consensus among analysts expects a drop in output in Latin America and the Caribbean between -2% and -6%, which comparative terms would be deeper contractions than the debt crisis of the eighties (-2.4%) and the … [Read more...] about Possible macro-fiscal consequences of COVID-19 in Latin America