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Output in Latin America and the Caribbean (LAC) remained in low gear in 2013, reflecting subdued global trade, lower growth in emerging markets such as China―a key market for LAC’s commodity exports―reduced external demand and, in some cases, domestic supply challenges. Growth decreased slightly to 2.7% in 2013, from 2.9% in 2012, while inflation rose to 6.7%. Disparities persist, however, among countries and sub-regions. Whereas the pace of growth increased from 2.1% in 2012 to 2.7% in 2013 in South America , overall growth in Developing Central and North America dropped to 1.7%. The economic performance of the Caribbean slowed down to 2.2%, where activity is constrained by low tourism flows and a decline in construction.
Countries in the LAC region are well on the way to achieving most of the MDGs, including halving the proportion of extremely poor people, primary education completion, gender parity in secondary education and access to safe drinking water. The target of universal access to HIV/AIDS treatment is also within reach. Steady progress has also been made in reducing the under-five child mortality rate by more than 50% between 1990-2011. However, more needs to be done in the area of maternal mortality and extreme poverty. With about 80 million people still living in extreme poverty and some 24 million people living without access to electricity, further challenges remain to be addressed.
In 2013, OFID worked to boost socio-economic development in 16 LAC countries with the provision of a substantial US$313.9m in financing - a three-fold increase over 2012. The funds were distributed across a variety of sectors and mechanisms, with almost two-thirds (64.6% or US$202.5m) delivered in public sector lending, and one-half of that share (US$100.0m) dedicated to improving urban water and sanitation in Jamaica and Panama.
Five private sector initiatives - with a combined value of US$70m - were approved; two for direct investment in the industry and energy sectors, and three financial sector transactions. Among the latter is support to the residential housing mortgage market in Nicaragua; to small agriculture entrepreneurs in Paraguay; and to the activities of the Inter-American Corporation for the Financing of Infrastructure.
Trade finance approvals amounted to US$40m and targeted the needs of the region’s SMEs. A number of small grants were also approved, among them one of US$0.5m to help set up a regional hub for the manufacture and distribution of clean cookstoves. Involving seven countries, this initiative is expected to directly benefit more than 200,000 people.