"We've advocated a lot for progressive tax reform in the
region,” Chalk told Reuters. "I think it's really important that
rich people pay what they should pay for taxes, and rich
corporations also."
He said this did not necessarily mean higher taxes, but
better ways to curb tax avoidance and loopholes.
EVEN SLOWER REGIONAL GROWTH
The IMF said on Monday the economic growth rate for Latam
and the Caribbean is expected to slow further to 1.8% this year
after slipping to 3.9% in 2022 from 7% in 2021, based on the
IMF's most recent World Economic Outlook. Growth is seen
accelerating again in 2024, albeit at a still sluggish 2.1%.
Higher interest rates and falling commodity prices hit
economic growth in the region last year and 2023 could bring a
slowdown in the United States and euro area, key trading
partners, the IMF said.
Government bond spreads versus U.S. Treasuries shot up
across Latam after Russia's invasion of Ukraine a year ago, but
they really took off midyear when spreads widened in July to
near 550 basis points from a June low of 366 bps, based on a
widely-followed JPMorgan index. There is a risk of more downward pressure on Latam growth as
advanced economies are still fighting inflation. Tighter
monetary conditions in developed countries could contribute to a
weakening in emerging market currencies.
"Our concern would be if the advanced economies have to do
more to inflation, if their economies slow, if the
world becomes a riskier place and risk aversion boils - for
example because of an escalation of the war in Ukraine," Chalk
said.
Many Latin American countries moved early to raise rates and
are have little motivation to keep raising them, "so then the
system will equilibrate with more capital flowing out of weaker
currencies," he said.
"That's not our baseline," Chalk said, "but we're conscious
of those risks."
(Reporting by Rodrigo Campos. Editing by Jane Merriman)
By Rodrigo Campos
NEW YORK, Feb 1 (Reuters) - Latin America and the
Caribbean will face rising poverty and food insecurity in 2023,
and trust in government will remain low as long as corruption
remains high and the wealthy do not pay their fair share in
taxes, the International Monetary Fund said on Wednesday.
Latin America's slowing economic growth and high inflation
could intensify social unrest, as "many people in the region
will see their living standards decline this year," IMF
officials wrote in a blog post.
"Finding common ground to pursue sensible economic reforms
in an environment of important social tensions will be an uphill
battle," they wrote.
Nigel Chalk, deputy director of the IMF's Western Hemisphere
department and one of the blog authors, said the IMF's focus is
on what the public sector can do to ensure citizens feel their
government is working on raising living standards, while also
tackling corruption.
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