By: Staff Writer
August 22, 2025
The Inter-American Development Bank (IDB) in their Impact Report, 2025 warns that the high level of debt of countries in the Latin America and Caribbean (LAC) region is limiting their ability to create fiscal space and ability to invest in infrastructure, climate change resilience programs and social programs.
The report also said: “Large segments of the population across the region continue to face high levels of labor informality, poverty, inequality, and food insecurity. Productivity remains low. Weak institutional capacity, high crime rates and large increases in intra-regional migration present additional challenges. Vulnerability to disasters triggered by natural hazards and climate change present risks of large economic losses.
Despite the LAC’s strengths, the region faces persistent challenges, including slow economic growth, fiscal vulnerabilities, low productivity, and high labor informality. Over the last four decades, growth rates in LAC have lagged behind those of Emerging and Developing Europe, Emerging and Developing Asia, and the ASEAN-5.
“Although the region has returned to pre-pandemic growth levels, projected growth for 2025 is only 2.3 percent, reflecting ongoing difficulties in achieving higher productivity and economic stability.
“Real GDP per capita growth remains modest, indicating slow improvements in individual economic well-being. Furthermore, the export growth rate of differentiated goods and knowledge-based services declined by 0.8 percent in the most recent measurement (World Bank 2025), signaling constraints in the region’s ability to innovate, compete in global markets, and sustain long-term growth prospects.”
They IDB also said that they are working, “to become a more effective, accountable, and learning-oriented organization, adjusting its internal systems to better prioritize development impact.
“The approval of a new Development Effectiveness Policy Framework for the IDB sets clearer standards and expectations for managing for results across the project cycle. IDB Invest is further reinforcing its end-to-end Impact Management Framework, while IDB Lab is strengthening its results management systems, streamlining the aggregation of outcomes under its Innovation Results Framework to support portfolio-level learning and decision- making.”
The report also said: “The IDB Group’s Impact Framework translates IDBStrategy+ into measurable outcomes for LAC and heightened ambition for our performance and contributions to development. Mission Scorecard indicators track our ambitions for the region using 15 indicators on long- term progress towards the core objectives of IDBStrategy+.
“The Portfolio Results indicators capture tangible results delivered for the people of LAC. The Performance Targets help steer the institution with targets for results delivery, support for key priorities, and other critical elements of performance and contributions to development.”
The report continued: “The IDB Group was on track in 2024 with regard to most of its Performance Targets. Notably, our achievement of development results at completion reached 63 percent for IDB, below its 75 percent target but representing an increase compared to 2023, and 68 percent for IDB Invest, exceeding its target.
“The alignment of new projects with IDBStrategy+ priorities such as economic growth, climate resilience, and gender equality was on track across all three Group entities. Satisfactory performance during execution reached 80 percent for IDB—below its 82 percent target, 57 percent for IDB Invest—below its 70 percent target, and 69 percent for IDB Lab compared to its 70 percent target.
“The IDB Group deployed $9.6 billion in direct third-party financing and $700 million in other third-party financing, keeping both indicators on track with respect to their 2024-2030 targets. Eighty-one percent of IDB Group stakeholders consider it to be effective in fostering public-private synergies and performance on most indicators measuring corporate foundations improved.”