The World Bank has improved its growth projections for Argentina in 2021 and 2022

The multilateral organization has again revised upwards its forecast for economic expansion in Latin America and the Caribbean for 2021, based on 6.3% against 5.2% projected mid-year. But the figure is still lower than the 6.7% contraction of 2020.

The half-yearly report of the world Bank for Latin America and the Caribbean indicates that growth forecasts for 2022 and 2022 are “equally poor” at 2.8% and 2.6%, respectively. This implies a return to the region’s annual growth rate in the 2010s, when regional GDP grew by 2.2%, compared to 3.1% for the rest of the world.

“The weak recovery, added to the low growth rates of the previous decade, suggests the existence of internal structural problems in the region,” the Bank explained.

“If these structural factors are not taken into account, it is likely that anemic growth will continue and will be insufficient to advance in the fight against poverty, and to ease social tensions,” he warned.

Among the challenges facing the region are the reappearance of the virus, the contraction of global liquidity due to a rate hike to curb inflation, and the high indebtedness of the private sector. In addition, the average ratio of public debt to GDP has increased “dramatically” in two years, by 15 points, reaching 75.38%, according to the report.

“The urgency to tackle the long neglected political agendas that are holding back growth in the region is increasingly evident,” the Bank noted.

According to the report, the World Bank recommended in terms of energy, that production be more environmentally friendly and aim to eliminate subsidies.

Although he did not specify to cut public spending across the board, he stressed that he was looking to hire to reduce corruption. Ineffective spending resulting from bribes and inflated budgets, he estimates, is “huge,” at around 26% of project costs.

“Increasing tax collection is essential and increasing taxes without affecting growth is possible,” says the report, which suggests increasing property taxes or taxing sugary products.

In addition, he suggests tackling tax evasion, noting that in the region the average rates of VAT and corporate tax evasion are 29.4% and 49.2%, respectively.