Macroeconomic policies for investment and sustained and sustainable development

Climate crises will adversely impact the already weak and volatile growth of Latin American and Caribbean countries and significant public and private investment in adaptation and mitigation will be needed to address the effects of climate change. This is no easy proposition in a region that underinvests and has a complex macroeconomic scenario. Macroeconomic and financing policies have great potential to boost investment, but fiscal policy must safeguard public investment during fiscal consolidation processes and find ways to enhance it during recovery phases in order to crowd in private investment. Monetary policy, in coordination with macroprudential regulation, must not only help to manage domestic demand over the economic cycle, but also embed climate-related risk in financing.