Latin America - are inflation and low growth inevitable?

Speech (virtual) by Mr Alexandre Tombini, Chief Representative for the Americas, Bank for International Settlements, at the FGV São Paulo School of Economics, 10 November 2022.

A tribute to the thought and memory of Professor Werner Baer

Are high inflation and low growth inevitable in Latin America? The list of challenges is long, but there are no grounds for fatalism.

Over the past three decades, Latin American countries have built up strong macro financial policy frameworks. Between the turn of the millennium and last year, inflation in most countries of the region was lower and more stable than at any time in the 20th century, despite large shocks. Financial crises – a perennial feature of the past – have been notably absent in the region. This track record shows that good policies can and do make a difference.

Today, the challenge is to build on these achievements, get inflation back to target and embark on a trajectory of high and sustainable growth. Macroeconomic and financial stability are a necessary condition for this, but they are not enough. Also needed are structural policies to make economies more competitive and dynamic, social policies to make growth inclusive and environmental policies to make development sustainable.