Connected: Digital Technologies for Inclusion and Growth

Latin America and the Caribbean (LAC) continues to competently manage the challenges imposed by weak global demand, higher levels of indebtedness, uncertainty surrounding the war in Ukraine and the recurrent - albeit declining - inflationary pressures affecting many regions of the world. Overall, the response in the form of sound macro policies unimaginable in the region just a generation ago resulted not only in greater resilience to adverse shocks, but also in better inflation management, stronger financial sectors and a relative calm in global markets. Employment levels have largely recovered, while poverty and inequality are approaching their pre-2019 levels. Forecasts for the region have steadily improved over the past six months. Overall, however, the global environment, while still improving, will remain adverse, while debt service will remain substantial and budgets tight. Furthermore, the poor growth prospects for LAC are not a consequence of the pandemic, but reflect long-standing structural issues. Addressing them requires an increasingly elusive social consensus, as wages stagnate and household income remains depressed, particularly among the middle class, while citizens express dissatisfaction with governments.