Moreno noted Latin American and Caribbean countries have yet to recover from decades of underinvestment in infrastructure, in contrast with Asian countries that have faster-growing economies, such as China and South Korea.
"To reach that level [Latin America and the Caribbean] need to invest at least double what they are currently investing in that sector, 2% of GDP annually. They need to spend between 4% and 7% of GDP per year for the next two decades in order to have high-quality infrastructure that can become the backbone of our development," he said.
Outlook for 2008:
According to the year-end report, the outlook for Latin America and the Caribbean for 2008 is favorable, despite the instability in international financial markets. Consensus forecasts for regional growth range between 4% and 4.5%, down from 5% in 2007. The decrease would largely stem from a slowdown in the U.S. economy and a possible weakening of prices for Latin American exports.
Regional inflation, which in 2006 was at a historical low of 5%, was 5.3% in 2007. According to different analyses, it will tend to increase in several Latin American countries in 2008. On the fiscal front, several countries that posted primary surpluses this year could slide into deficits next year, since very few have taken steps to strengthen public sector revenue and offset increased spending.
In terms of social impact, in 2007 Latin America and the Caribbean reached the lowest levels of poverty and indigence in 17 years (35.1% and 12.7%, respectively. However, there are marked disparities. While Brazil, Chile and Mexico have reached the Millennium Development Goal of halving the extreme poverty rates of 1990, several countries are still far from reaching their targets.
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Inter-American Development Bank
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