By Richard Johnstone | 8 December 2014

Latin American countries must prepare for ‘a double transition’ as the cost of borrowing rises and the region’s growing middle class demand better public services like health care and education, International Monetary Fund managing director Christine Lagarde has said.

Speaking at a close of a fund conference in Chile’s capital Santiago on the challenges for securing growth and shared prosperity in Latin America, Lagarde said the event had discussed the key issues facing the region. These included how to boost slowing growth, as well as what steps can be taken to improve education and infrastructure and to ensure balanced and sustainable growth.

After almost two decades of impressive increases in economic output that helped lift millions of people out of poverty, the region must prepare for changes, she warned.

‘Latin America is experiencing a double transition: first, commodity prices are falling and external financing conditions are becoming less favorable; second, a rising middle class is demanding better public health services, education and infrastructure,’ Lagarde said.

‘The policymakers and delegates who gathered in Santiago agreed that, given the economic challenges ahead, we need to break through capacity constraints and further develop human capital across the region. Many lessons emerged from countries in the region that have had some success grappling with these issues. We all take away new ideas and inspiration to consider for policymaking over the years to come.’