The Latin American Economic Outlook 2024: Financing Sustainable Development is the product of longstanding co-operation between the OECD, the United Nations Economic Commission for Latin America and the Caribbean, the Development Bank of Latin America and the Caribbean, and the European Commission.
This 17th edition focuses on how Latin American and Caribbean (LAC) countries can mobilise resources to tackle socio-economic challenges and promote economic development, energy transitions and growth, in line with the Sustainable Development Goals. It offers policy recommendations to increase spending efficiency, optimise budget allocation, improve access to finance, and boost productivity.
The Outlook highlights that countries can improve public spending, tax collection, and the way they raise and manage public debt. Better targeted spending towards households and businesses most in need would enhance value for money, and citizens’ and businesses’ trust in government. Optimising the tax administration and tax revenues would improve the state’s capacity to strengthen institutions, enable the provision of better public services, minimise distortions to entrepreneurship, and promote equality of opportunities.
Financial systems with more depth, efficiency and better access can provide citizens and businesses in LAC countries with opportunities to increase investments. Countries in the region have made significant progress in improving depth and access to finance. Domestic credit to the private sector rose from 22% of GDP in 2000 to 50% of GDP in 2022. Account ownership nearly doubled from 29% in 2011 to 57% in 2021 for people aged 15 or above.
To maintain this positive trajectory, the Outlook recommends investing in digital innovation and digital literacy, and expanding market finance. Digital banks and payments have increased in importance, while financial literacy remains limited. Market capitalisation is at 36% of GDP, compared with 65% in OECD countries, with large companies accounting for a large share of it. Expanding fixed-income and equity markets, including venture capital and private equity, would boost innovation and productivity. Innovative financial instruments, such as green, social, sustainability and sustainability-linked bonds, catastrophe bonds, and debt-for-nature swaps, could mobilise additional resources, though further progress in the regulation and the supervision of these tools will be necessary.
Renewed regional and international partnerships will be important to mobilise greater resources in LAC. This includes the EU-LAC Global Gateway Investment Agenda, which aims to mobilise EUR 45 billion investment in LAC by 2027. Better alignment among national, regional, and multilateral development banks and other capital market actors is key to achieve this.
In the coming months, the LAC region has an opportunity to bring its perspective to the international debate on the transformation of the international financial architecture, including through the follow-up to the Paris Pact for People and the Planet, and at the Finance in Common Summit and the United Nation’s Fourth International Conference on Financing for Development.
We stand ready to work together to support the region’s efforts, and trust that this report provides a solid basis for the ambitious policy dialogue that is needed at national, regional and international levels.
Mathias Cormann
Secretary‑General, OECD
Sergio Díaz‑Granados
Executive President, CAF – Development Bank of Latin America and the Caribbean
José Manuel Salazar‑Xirinachs
Executive Secretary, ECLAC
Jutta Urpilainen
European Commissioner for International Partnerships