Country Economic Memorandum
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Publication From Landlocked to Land of Opportunity: Paraguay Country Economic Memorandum(Washington, DC: World Bank, 2024-07-09) World BankParaguay has been a beacon of macroeconomic stability, but like the rest of the region, its average growth has moderated since 2013, which has affected the pace of poverty reduction. To accelerate growth and poverty reduction, it is important to continue to increase resilience against external shocks, productivity, and the sustainability of growth. Improving the quality and efficiency of public institutions, market efficiency, innovation, education, and infrastructure will promote economic productivity. Diversifying exports away from unprocessed commodities will strengthen economic resilience but will be a lengthy process. Meanwhile, the continued commitment to stable macroeconomic and fiscal policies, a deepened financial sector, and risk mitigation policies will increase economic resilience. Paraguay does not have to choose between profitability and sustainability: both are possible and complementary. Greener growth will yield a stronger, more prosperous economy.Publication Argentina Country Economic Memorandum: A New Growth Horizon - Improve Fiscal Policy, Open Markets, and Invest in Human Capital(Washington, DC: World Bank, 2024-06-20) World Bank GroupArgentina’s production capabilities, characterized by its abundant natural capital assets and well-educated workforce, have the potential to drive sustained and inclusive economic growth. Argentina is home to diverse natural resources, including the world’s second-largest deposits of lithium, and the second-largest gas shale and fourth-largest shale oil reserves. Its fertile land makes it a major agricultural producer, ranking third in soybean production worldwide. Human capital is rooted in its historically high-quality education and health services, as well as notable achievements in knowledge-intensive sectors such as research and innovation. This report identifies three key constraints to sustaining growth in Argentina. First and foremost, macroeconomic volatility is largely responsible for poor growth outcomes: high policy uncertainty and fiscal procyclicality have contributed to a cycle of booms and crashes. Volatility is also driven by an increasing overreliance on primary commodities. Stubborn and high inflation in addition to abrupt changes in exchange rates reduce planning horizons for long-term investment and impede the development of capital markets. Second, restrictive trade policies, in place partly because of macroeconomic imbalances, prevent Argentina from leveraging its vast comparative advantages to reap the benefits of international trade. Third, while human capital is among Argentina’s greatest assets, its quality is gradually declining. Without corrective policies, the skills of the country’s workforce could fall rapidly behind those demanded by a dynamic, technology-driven, knowledge-intensive global economy.