ECLAC hdqts.
Santo Domingo.- The fiscal trajectory of Latin America and the Caribbean reveals important differences among the countries of the north and the south of the continent, which show divergent trends of their deficits, income and fiscal expenditure.
The report Fiscal Outlook for Latin America and the Caribbean 2017, released Wednesday by the Economic Commission For Latin America and the Caribbean (ECLAC), calls for caution in spending and public investment to boost growth, innovation, technological change and face climate change.
It said that during 2016 the average fiscal deficit remained stable in the countries of the region and stood at -3% of the regional GDP for the second consecutive year, although with marked sub-regional differences: (-2.4% of GDP in 2015 to -2.2% of GDP in 2016) and worsening in South America (-3.6% of GDP in 2015 to -4% of GDP in 2016).
It also notes the divergence in the evolution of tax revenues and expenditures among sub-regions.
Latin America’s total revenues increased slightly compared with output in 2016, reaching 18.4% of GDP in the average of the 17 countries covered, thanks to the increase in revenue in Mexico (two percentage points of GDP) and Central America, Haiti and the Dominican Republic (0.5 percentage points of GDP).
In South America, meanwhile, there was a significant fall (0.5 percentage points of GDP), as a result of a fall in its tax revenue.
“In terms of expenses, the divergent trajectory in capital expenditures stands out. These expenditures in Mexico (1.1 percentage points of GDP, partly due to the recapitalization of Pemex by the federal government) and in the Central American isthmus, Haiti and the Dominican Republic (0.2 percentage points of GDP), the Capital expenditures in South America fell significantly (0.5 percentage points of GDP),” the ECLAC report said.