“The region that has known how to weather the economic turbulence,” is how Rodrigo Valdés, director of the Western Hemisphere Department of the International Monetary Fund (IMF), referred to Latin American countries that managed to cope with the great economic shocks that impacted in recent years. years due to the pandemic, inflation and the unleashed war.
Among the governments that were able to control these inflationary blows are Paraguay, the Dominican Republic, Uruguay and Costa Rica, through economic policies that keep these countries fiscally sustainable.
“This general framework of macroeconomic policies, which includes inflation targets, autonomy on the part of central banks, exchange rate flexibility, fiscal rules that seek to guarantee fiscal sustainability, but with margins for deviations in exceptional cases, and international financial integration, has been expanded to countries such as Paraguay, Dominican Republic, Uruguay and Costa Rica that have adopted this framework and achieved very good results,” explained Valdés.
Furthermore, he compared these measures taken by countries, including Paraguay, to how small but developed and advanced countries such as New Zealand, Australia, Sweden and even Canada are conducted. Likewise, Valdés explained that other shocks could still arise unforeseen that may be more difficult to absorb in a region in the process of development.
On the challenges that the region is facing today and that governments should take note of, Valdés mentions that he has to promote the potential for long-term growth and overcome the stagnation of productivity; improve the persistently unequal distribution of income and power; contribute to mitigating climate change and adapting to its effects; and adapt to automation, robotization and digitization. “An orderly macroeconomy is the first requirement to address these challenges. The achievements made by various countries in the region in recent years allow us to harbor a renewed sense of hope and optimism for the future”, he concluded.