The increase in production in the agribusiness, construction and tourism sectors presents important opportunities to reactivate the economy during 2023 thanks to the significant amount of inputs they demand from the rest of the sectors and the weight they represent in these countries, with an average of 22% of the region's production, according to the study. 

The IDB's most recent annual economic report for the region -Opportunities to boost production, employment and value chains- analyzes the productive structure of these countries in order to identify strategies for economic reactivation, job creation and export diversification.

The study also highlights sectors that, by increasing their production, have an important impact on employment generation and wages, including agriculture, forestry and fishing, tourism, commerce and education.

Likewise, financial services, professional services and commerce enable productive networks as they make use, to a greater extent, of the rest of the sectors. According to the report, it would be positive to promote an efficient financial system, and complementary professional services for high quality business and technical and science (STEM) skills.

The IDB also proposes opportunities to diversify exports and products, which is especially relevant to mitigate the volatility of international demand. These include exports of agricultural goods, and products such as more complex textiles, machinery, electronic equipment and medicines, which would allow countries to better integrate with local and global export chains. Another recommendation is to invest in education, as the evidence shows that it promotes the participation of local companies in global export chains.

Macroeconomic context of the region

The report also details the macroeconomic context of the region in 2022, a year in which GDP grew by an average of 5.7% and proved resilient thanks to the recovery in tourism, remittances, and less volatile exports in agricultural products.

Formal employment recovered by october 2022, reaching 5% above its pre-pandemic level. Inflation is expected to slow in 2023, although it remains at the high end of the target range.

However, an environment of lower growth, higher interest rates and prices, especially food prices, is forecast for 2023, posing a challenge for the region in terms of poverty and food security. The countries' response is essential to coordinate actions in the face of these challenges, promote economic recovery and recover development gains.

A new study by the Inter-American Development Bank (IDB) identifies the sectors with the greatest potential to generate employment and growth in the countries of Central America, Mexico, Panama and the Dominican Republic.

The increase in production in the agribusiness, construction and tourism sectors presents important opportunities to reactivate the economy during 2023 thanks to the significant amount of inputs they demand from the rest of the sectors and the weight they represent in these countries, with an average of 22% of the region's production, according to the study. 

Translated by: A.M