Countries in Latin America and the Caribbean have sought to develop deep and well-functioning domestic bond markets since the beginning of the 21st century—a reaction in part to the financial crises of the 1990s and their relationship to government borrowing abroad, mainly in foreign currencies. As a result, the outstanding level of marketable public debt issued under domestic … [Read more...] about Developing Domestic Bond Markets for Growth and Stability
Macroeconomics and Finance
The Impact of Low Economic Growth and Inflation on Households: A Conversation with Eric Parrado, IDB Chief Economist
This article is part of an effort to make the concepts of our Latin American and Caribbean Macroeconomic Report, which at first sight may seem complex, more accessible to the general public. To explain what the drop in GDP suffered by Latin America and the Caribbean in 2020 as a result of the pandemic means in practical terms, Eric Parrado, Chief Economist and General … [Read more...] about The Impact of Low Economic Growth and Inflation on Households: A Conversation with Eric Parrado, IDB Chief Economist
Easing the Credit Crunch on Small and Medium-Sized Enterprises
Small and medium-sized enterprises (SMEs) comprise the overwhelming majority of formal businesses and create around half of formal employment for the average country in Latin America and the Caribbean, with that percentage rising to 80% in some cases. Yet, despite their immense importance to the economy of the region, these firms consistently struggle to get access to credit … [Read more...] about Easing the Credit Crunch on Small and Medium-Sized Enterprises
US Banking Fragilities and the Potential Impacts on Latin America and the Caribbean
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