The International Monetary Fund (IMF) lowered this Friday the forecasts for economic growth in 2020 of Chile to 7.5%, Colombia to 7.8%, Peru to 13.9% and Venezuela to 20% in the midst of the deep crisis caused by the coronavirus pandemic.
The new projections of the Fund contrast with what was anticipated just three months ago, and show the largest downward revisions in Peru, more than nine percentage points worse than expected; followed by Colombia, more than five points less; Venezuela, five less; and the lowest in Chile, with three percentage points below what was anticipated for this year.
“The pandemic is still expanding rapidly, indicating that social distancing measures will need to remain in place for a longer time, which will depress economic activity in the second half of 2020 and leave even more scars,” Alejandro Werner, director of the Western Hemisphere Department, pointed out when presenting the regional report.
For 2021, a “smooth recovery” in GDP growth of 5% is expected in Chile, 4% in Colombia, 6.5% in Peru and a less sharp contraction of -5% in Venezuela, according to the Fund’s data.
In Central America and the Dominican Republic, the forecasts are also bleaker, with a drop in the combined GDP of 5.9% this year, three and a half points below the forecast in April; and a slight 3% rebound in 2021.
Although Werner highlighted the “difficult prospects”, he pointed out as a positive element that “financial conditions have relaxed in recent weeks, reflecting the forceful actions of central banks in advanced countries, which have allowed some countries to issue debt abroad. “