Several bank failures, and the high volatility in US bank equity prices, have raised considerable concern in recent weeks. The March 10 failure of Silicon Valley Bank (SVB) followed just two days later by that of Signature Bank shocked many observers. There were hopes that these were isolated incidents, but other regional banks soon came under pressure. First Republic Bank … [Read more...] about US Banking Fragilities and the Potential Impacts on Latin America and the Caribbean
Debt, Growth, and Interest Rates: Assessing Sustainability in Latin America and the Caribbean
Debt levels in Latin America and the Caribbean increased steadily during the last decade and soared in 2020 with the COVID-19 pandemic, reaching 72% of GDP. In response to the pandemic, countries mobilized considerable resources to support families and firms. Since 2020, debt ratios have declined as economies recovered and fiscal deficits were shaved. Still, with falling growth … [Read more...] about Debt, Growth, and Interest Rates: Assessing Sustainability in Latin America and the Caribbean
Dealing with Debt
The Rise in Debt Total debt in Latin America and the Caribbean has risen to 5.8 trillion US dollars from under 3 trillion in 2008, or to 117% from around 60% of GDP. Total debt in the five largest economies is around 140% of GDP. While this is lower than in many advanced economies, emerging economies face higher interest rates, greater risks and a larger drag on growth from … [Read more...] about Dealing with Debt
Avoiding Economic Long-COVID: Policies to Support Firms and Workers in Latin America and the Caribbean
During the peak of the COVID-19 crisis, governments in Latin America and the Caribbean aided firms and households with support packages coordinated with central bank monetary policy. For many, liquidity injections and flexible financial sector supervision helped ease the pain. While many small firms closed their doors during the crisis, surprisingly few larger … [Read more...] about Avoiding Economic Long-COVID: Policies to Support Firms and Workers in Latin America and the Caribbean
From Pandemic to Inflation and War: Challenges for Policymakers in Latin America and the Caribbean
After a robust economic recovery last year from the lows of the pandemic, Latin America and the Caribbean faces strong headwinds from potential new coronavirus variants, inflation-fighting efforts in advanced economies, and the war between Russia and Ukraine that could depress world growth and even push the region into recession by 2023. Riding a wave of strong growth … [Read more...] about From Pandemic to Inflation and War: Challenges for Policymakers in Latin America and the Caribbean