The Inter-American Development Bank has issued a report that puts the region's gross national saving rate at 17.5 % of Gross Domestic Product between 1980 and 2014.
This compares unfavourably with the 33.7 % savings found in Emerging Asia and the 22.8 % for advanced economies. Only Sub-Saharan Africa saved less than Latin America and the Caribbean which has a saving rate of 13.8 %.
The report found that savings in households, governments and firms were beneath acceptable levels. The report says at this rate the region is ill-equipped to face the economic hardships forecast for this year.
However it also says reversal is possible, and the returns can be seen quickly. The authors' project for every 1 percentage point increase in national saving- domestic investment in the region will increase by almost 0.4 percentage points. This accounts for an additional $20 billion that can be used for development projects.
The Inter-American Development Bank report entitled 'Saving for Development: How Latin America and the Caribbean Can Save More and Better' also offers steps to improving regional savings which includes improving tax collections systems, reforming the pension system and encouraging governments to encourage citizens to save more money.