Growth’s Secret Weapon: The Poor and the Middle Class


By Era Dabla-Norris, Kalpana Kochhar, and Evridiki Tsounta

(Versions in  Español中文 日本語عربي,and Русский)

The gap between the rich and the poor is at its widest in decades in advanced countries, and inequality is also rising in major emerging markets (Chart 1).  It is becoming increasingly clear that these developments have profound economic implications.

SPR Inequality SDN.chart 1rev

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Financing for Sustainable Development: Money and the Right Policies


By Min Zhu and Sarwat Jahan

(Versions in Español,  عربي)

Countries will start a new chapter in their development this year with the United Nation’s Sustainable Development Goals. Designed to replace the Millennium Development Goals, these new goals will broaden the vision of development to embrace economic, social, and environmental issues. To achieve these goals, two elements are critical: money and the right policies to use the money. The IMF, along with many others in the global community, will partner with countries to bring these two elements together.

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Raising Long-Run Growth in Latin America and the Caribbean—A Complex(ity) Issue


By Fabiano Rodrigues Bastos and Ke Wang

(Versions in Español and Português)

Growth in Latin America and the Caribbean has weakened significantly over the last few years. Part of this weakness appears to be here to stay, and IMF economists have marked down medium-term growth projections. This story sounds eerily familiar, given the region’s past difficulties to improve its comparative growth performance.

Abstracting from the “golden decade” from 2003 to 2011, when rising commodity prices powered a strong expansion, why has the region been unable to sustain sufficiently high growth rates to catch up with more advanced economies? Part of the answer is Latin America’s modest success in branching out into more sophisticated—or complex—goods.

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A Watershed Moment for Latin America: Nine Takeaways from our High-Level Conference


Alejandro WernerBy Alejandro Werner

(Versions in Español and Português)

Latin America has reached a critical moment. So much better off than two decades ago, and still facing deep-seated problems that get in the way of sustained strong growth and economic development. To better understand these problems from countries’ perspectives, and explore ways the IMF and others can help address them, we brought together experts from the region and beyond—central bankers, finance ministers, and academics—for a high-level conference in Washington, D.C. earlier this week.

Under the theme of “Rising Challenges to Growth and Stability,” participants engaged in lively debates about the current difficulties facing Latin America and the policy priorities for now and the future.

Here are my main takeaways from the event:

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Reigniting Strong and Inclusive Growth in Brazil


2014MDNEW_04By Christine Lagarde 

(Versions in Español and Português)

Brazil has made remarkable social gains over the past decade and a half. Millions of families have been lifted from extreme poverty, and access to education and health has improved thanks to a series of well-targeted social interventions, such as Bolsa Familia, the conditional cash transfer program. I was privileged to see some of this tangible progress during my visit to Brazil last week.

I met with Tereza Campello, Brazil’s Minister for Social Development, who explained the network of social programs in the country, and guided us on a visit to Complexo do Alemão—a neighborhood and a group of favelas in the North Zone of Rio de Janeiro. We got there after a ride on the recently built cable car, which links several neighborhoods on the hills to the North Zone. This is a great example of infrastructure that has contributed immensely to improving the economic opportunities of people, who now have a quick way to move around and connect to the larger city. The stations themselves are also focal points of the efforts aimed at improving the daily lives of the people of Rio de Janeiro, since they house important services such as the youth center, a social assistance center, a public library, a training center for micro-entrepreneurs, and even a small branch of the bank that distributes the Bolsa Familia monthly grants.

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Latin America and the Fiscal Stimulus: A Mild Hangover, Not Yet an Addiction


Alexander KlemmBy Alexander Klemm

(Versions in Español and Português)

Latin America is heading for tougher times. Regional growth is expected to dip below 1 percent in 2015, partly as a result of the drop in global commodity prices. How well placed is the region for the coming lean times?

Countries face this slowdown from much weaker fiscal positions than when the global financial crisis hit. Then, Latin America responded strongly with expansionary fiscal policies, including explicit fiscal stimulus programs in many countries. But, as growth has recovered, this increase in spending has proved difficult to reverse.

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Northern Spring, Southern Chills: Outlook for Latin America and the Caribbean


Alejandro WernerBy Alejandro Werner

(Version in Español and Português)

Economic activity in Latin America and the Caribbean has been cooling down for several years, and the temperature in many places is still falling. Regional growth is now expected to dip below 1 percent in 2015—down from 1.3 percent in 2014. Apart from a short-lived recession during the global financial crisis, this would be the slowest rate of growth since 2002.

However, growth dynamics vary across the region, broadly along North-South lines. While spring may be in the air for Mexico, Central America, and parts of the Caribbean, the economic climate remains decidedly chilly in much of South America. What is behind these divergent prospects, and how can a sunnier outlook be restored to the entire region?

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