The economies of Central America need to strengthen their “financial resilience” against the effects that climate change may cause, representatives of the International Monetary Fund (IMF) indicated this Tuesday in Costa Rica. At the end of the XVIII Regional Conference on Central America and the Dominican Republic, Nigel Chalk, Deputy Director of the IMF’s Western Hemisphere Department, explained at a press conference that the “resilience” of these economies is a “key issue” for the fund.
“We think a lot about financial resilience, how to ensure that the financial system itself is resilient to potential risks that arise with climate change,” said Chalk.Central America, due to its geographical position between the Pacific Ocean and the Caribbean Sea, is a region hit by climatic phenomena such as hurricanes, floods, or droughts that “are much stronger (due to climate change) than they were in the past,” commented the IMF official.
For this reason, Chalk highlighted that during the closed-door discussions in San José, they talked about how to make physical infrastructure more resilient economically, or how to ensure fiscal decisions make investments “more tolerant” to the possible consequences of climate change.
On the other hand, he also emphasized the importance of reducing greenhouse gas emissions through the “creation of appropriate economic incentives in the countries” so that the private sector “chooses to reduce its emissions.”
“Many of the issues revolve around the economic design of systems to achieve the right results and reduce and mitigate emissions,” Chalk noted about the situation in Central American countries. “The regional growth is expected to remain robust at 3.9% in 2024,” the IMF added in a statement, nearly double that of Latin America and the Caribbean.
