The President of the Development Bank of Latin America and the Caribbean, Sergio Díaz-Granados, announced on Monday an immediate $550 million loan to provide liquidity to Bolivia.

The news was communicated directly to the new president of the South American nation, Rodrigo Paz Pereira, as the “first concrete operation of the Economic Recovery Support Program (PAREC).”

 The president of CAF stated: “We want to support the new government in transforming structural challenges into concrete opportunities for sustainable growth, strengthening macroeconomic stability, improving regional connectivity, and prioritizing the well-being of millions of Bolivians.”

With this loan, the multilateral institution becomes the first to present a concrete assistance plan to the country under the new government, which took office on November 8.

Díaz-Granados clarified that the funds will ensure compliance with urgent financial commitments and “generate certainty in the implementation of the government’s economic program.”

This loan approved for Bolivia is part of a larger package of up to $3.1 billion, planned for the next five years and subject to approval by the CAF Board of Directors.

These initiatives are based on four pillars: “macroeconomic stabilization, national and regional integration, well-being and social inclusion with a gender focus, and environmental sustainability and climate action.”

M.Pino

Source: xinhuanet

(Reference image source: Matheus Oliveira on Unsplash)

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In a recent update, the World Bank (WB) revised down its projections for China’s economic growth in 2023. Growth is now estimated at 5.2 %, marking an adjustment with respect to the previous forecast of 5.6 % made last June.

The Washington-based institution also revised up its forecasts for 2024, raising China’s Gross Domestic Product (GDP) growth from 4.4 % to 4.5 %, indicating an optimistic outlook for next year.

The report highlights the prospect of a protracted recovery in the housing sector and persistently weak external demand. The government is expected to maintain a moderately expansionary fiscal and monetary stance in 2024 to support growth.

The World Bank points to “structural constraints” to growth, including “high debt levels“, “ageing populations”, and “lower productivity growth.” It also identifies “significant risks”, such as a possible prolonged slowdown in the real estate sector, increased geoeconomic tensions and the impact of climate change.

Mara Warwick, World Bank Director for China, Mongolia and Korea, stressed that the easing of macroeconomic policy has supported the short-term recovery, but stressed the importance of

Complementary structural reforms to boost confidence and revive the momentum for growth. Improving China’s debt resolution framework and strengthening the enabling environment for private business are crucial, Warwick said.

During the third quarter, the world’s second-largest economy recorded an increase of 4.9% compared to the same period of 2022, still marked by the aftermath of the already dismantled national policy of ‘zero Covid’.

Beijing had set an official growth target of “around 5 %” for this year. Amid threats such as the housing crisis, local government debt risks, slow global growth, and geopolitical tensions, Chinese authorities have sought to counteract the weak post-pandemic economic recovery in recent months.

K. Tovar

Source: Bancaynegocios

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The president of Chile, Gabriel Boric, announced a bill to carry out a tax reform in the country, which aims to advance tax justice, prevent abuses and achieve growth in social justice for Chileans.

Boric explained that the tax reform is focused on tax justice, avoiding abuses and seeking to ensure that Chile grows with justice. He also aspires to finance structural reforms and the development of social rights such as health and pensions.

The project proposes a “wealth tax” for people with assets greater than five million dollars, as well as raising royalties for mining activities, seeking an improvement in the social rights of Chileans.

The president stated: “This reform is in favor of greater equity, greater social cohesion and is not against anyone. It is for a better distribution of the wealth that we all generate and that will allow us social rights”.

Key areas of the tax reform

The project presented by the executive addresses four major areas, and they hope that once approved, it will allow tax collection of 4.3% of the country’s GDP. The initiatives will be focused on:

• Restructuring the income tax: For which the aim is to create a modern semi-dual system, which stimulates business investment and directly encourages actions aimed at increasing their productivity and simplifying the system as a whole.
• Reduction of tax exemptions: It is related to the set of measures that will make it possible to dispense with loopholes that facilitate misrepresentation, in addition to strengthening the capacity to combat tax evasion, facilitating tax compliance for taxpayers.
• A new mining royalty: Which will increase the income resulting from the exploitation of non-renewable resources, without discouraging investments and the development of the sector. This tax will support “the country’s productive diversification,” as well as financing regional governments for their investments in social infrastructure and productive development.
• Corrective taxes: Which will be used to “promote the preservation of the environment, reduce emissions, the development of a healthy life and balanced territorial development.

M. Rodríguez

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Source: finanzasdigital.com

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