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Central American economies need to strengthen their “financial resilience” in the face of the likely impacts of climate change, an International Monetary Fund (IMF) representative said in Costa Rica on Tuesday.
At the end of the 18th Regional Meeting for Central America and the Dominican Republic, Nigel Chalke, Deputy Director of the Western Hemisphere Department of the International Monetary Fund, explained in a press conference that the “resilience” of these economies is a “critical issue” for the world economy of the Fund.
“We think a lot about financial resilience, how to ensure that the financial system itself is resilient to the potential risks posed by climate change,” Chuck said.
Due to its geographical location between the Pacific Ocean and the Caribbean Sea, Central America is a region that is exposed to climate phenomena such as hurricanes, floods or droughts, which are “more severe than in the past (due to climate change),” he said. The IMF official commented.
For this reason, Chuck stressed that during the closed-door debate in San Jose, they discussed how to make physical infrastructure more resilient in economic terms, or how to ensure that fiscal decisions make investments “more tolerant” to the possible consequences of climate change.
On the other hand, he also stressed the importance of reducing greenhouse gas emissions by “creating appropriate economic incentives in countries” so that the private sector “chooses to reduce emissions.”
“A lot of the issues are around the economic design of the system to be able to get the right outcomes and reduce and mitigate emissions,” Chuck said of the situation in Central American countries.
The IMF added in a statement that “growth in the region is projected to remain strong through 2024, at 3.9 percent,” almost double that of Latin America and the Caribbean.
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