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World Bank predicts Chilean growth to slow in 2023, declines to comment on tax reform

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The World Bank called on governments to improve public spending. The agency estimates that 17% of public budgets are wasted on inefficient initiatives and unnecessary labor costs.

The World Bank (WB) believes that the economies of Latin America and the Caribbean will grow faster than expected on average in 2022. However, this growth will slow down in 2023 and 2024.

For Chile, the World Bank 1.8% in 2022. Next year it will drop 0.5%.

According to the region’s economic outlook report, “A New Approach to Closing the Fiscal Gap,” released this Tuesday, the organization expects Latin America’s economy to has already recovered substantially to pre-pandemic levels, However, there is one caveat.

According to Agencia Efe, the World Bank’s chief economist for Latin America and the Caribbean, William Maloney, was unwilling to evaluate the tax reform plans announced in countries such as Chile and Colombia, but he said that the market had been slowing down. We have clarified that it indicates that: The region is well positioned to face the current economic uncertainty.

“Part of the legacy of covid is Regional Average Debt It’s been up about 10%,” Maloney explained at a press conference.

For experts, this increase in debt will be key as it could slow the growth rate of the local economy.

In addition sharp rise in interest rates Combatting the fiscal gap will become even more difficult as the world’s major central banks mandate to try to keep inflation in check.

Overall, World Bank economists forecast a 3% increase in the region’s Gross Domestic Product (GDP) in 2022. Russian invasion of Ukraine.

However, these favorable conditions If the same raw materials drop in price in 2023, they will become obstacles according to International Monetary Fund (IMF) projections, about 10%.

deceleration

The World Bank predicts that Latin America’s economy will grow by only 1.6% that year, but in 2024, the region’s GDP is projected to grow by 2.3%.

This slowdown is inequality in the economic system pre- and exacerbated by the pandemic, such as poverty and food insecurity for large segments of the population.

To this end, the World Bank encourages regional governments to: “Rethinking Growth Paths” the report said.

In this sense, one of Maloney’s most repeated recommendations was to improve public spending by governments. About 17% of the public budget is wasted on inefficient initiatives and unnecessary labor costs.

For nearly two-thirds of the countries analyzed, Saving this money means eliminating the public budget deficit entirely.

Experts have been reluctant to appreciate tax reform plans announced in countries such as Chile and Colombia, but markets are well positioned to face the current economic uncertainty for the region. I wanted to make it clear that I was implying that

According to some projections, even Argentina May face inflation of 90% or more per year Economists believe 2022 will be well placed to face higher prices, especially thanks to reaching an agreement with the IMF earlier in the year to receive about $44 billion.

Source: Biobiochile

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