Tuesday, March 19, 2024
spot_img
HomeNewsCaribbean NewsAgribusiness, construction and tourism could drive central America’s economy in 2023

Agribusiness, construction and tourism could drive central America’s economy in 2023

WASHINGTON, USA – A new Inter-American Development Bank (IDB) study points to agribusiness, construction and tourism as the industries with the greatest potential to generate jobs and growth in Central America, Mexico, Panama and the Dominican Republic.

The study found that higher production in these industries could galvanize the regional economy in 2023 for two reasons: the large volume of inputs they require from all other industries, and their economic clout, since they account for 22 percent of the region’s output.

The IDB’s new annual economic report on the region – Opportunities to Boost Production, Jobs, and Value Chains – analyzes these countries’ production structures to determine how to revitalize their economies, create jobs, and diversify exports. The study also highlights industries like agriculture, forestry and fishing, tourism, commerce, and education, which play an outsized role in generating jobs and incomes.

Financial services, professional services and commerce also stimulate production networks because they make more extensive use of other industries. The report therefore recommends promoting efficient financial systems, coupled with professional business services that are high quality and involve technical and scientific (STEM) skills.

The IDB study also proposes opportunities to diversify exports and products to smooth out the volatility of international demand. It recommends diversifying exports of agricultural goods, as well as of products like more complex textiles, machinery, electronic equipment, and pharmaceuticals that would help countries better integrate into local and global export chains. Additionally, the report urges countries to invest in education, which has been proven to help expand local business participation in global export chains.

Regional macroeconomic context

The IDB report also analyzes the region’s macroeconomic context in 2022. Over the year, its GDP grew by an average of 5.7 percent, and the economy showed resilience as tourism and remittances sprang back and the volatility of agricultural exports stabilized.

By October 2022, formal jobs had rebounded to levels 5 percent higher than before the pandemic. Inflation is forecasted to slow in 2023 but remain at the upper end of the ideal range.

However, the report predicts slower growth and higher interest rates and prices, especially food prices, in 2023, which will be especially detrimental to poverty and food security. The countries in the region need to design a coordinated response to these difficulties, promote economic recovery, and regain development momentum.

spot_img
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

spot_img
spot_img
spot_img

Caribbean News

St Lucia engages Canadian company on assessment of labour market

By Caribbean News Global contributor CANADA / ST LUCIA - Leading Labour Market Research and Management Consulting firm, Dunn Pierre Barnett & Company Canada Ltd...

Global News

Boosting productivity and increasing labour market participation would sustain Switzerland’s high living standards

GENEVA, Switzerland - Switzerland has shown remarkable strength during the COVID-19 pandemic and the recent turmoil in energy markets following Russia’s war of aggression...