The region’s economy expanded by nearly 4 percent, employment recovered strongly, and the service sector rebounded from the damage caused by the pandemic.
Inflationary pressures are receding in many countries due to the early and determined efforts of central banks as well as lower global prices of food and energy.
Despite this encouraging news on growth and inflation, 2023 is likely to be a challenging year for the region.
Slowing growth, high inflation, and global uncertainty mean that many people in the region will see their living standards decline this year and will likely face increased anxiety about their future.
Growing social discontent and diminished trust in public institutions has been an important trend in the region for some time. Social tensions were certainly exacerbated during the pandemic.
Many small businesses struggled during the lockdowns and the wages of middle-income workers were eroded by the subsequent surge in prices.
Reversing these trends and the impact of the pandemic requires restoring macro-economic stability and boosting growth durably through structural reforms.
Despite evident difficulties, policies must focus on securing economic stability, spurring growth and job creation, supporting entrepreneurship, and attending to the pressing social needs facing many people in the region.