March 5, 2021

The economy of Latin America and the Caribbean will fall 4.6% in 2020 due to COVID-19



The coronavirus pandemic will cause negative economic growth in Latin America and the Caribbean of 4.6% this year, with the steepest falls in Ecuador and Mexico that will see their economies contract by 6%, according to World Bank (WB) forecasts. ).

“The Gross Domestic Product of the Latin American and Caribbean region (excluding Venezuela) is expected to fall 4.6% in 2020. A growth return of 2.6% is expected for 2021,” said the latest semi-annual report. from the WB Office of the Chief Economist for the region, Martín Rama.

Among the most affected are Mexico and Ecuador, which will see their economies collapse by 6%; followed by Argentina and Brazil, with expected contractions of 5% this year.

“The governments of Latin America and the Caribbean face the enormous challenge of protecting lives and at the same time limiting economic impacts – Rama said – This will require directed and coherent policies on a scale rarely seen before.”

Economic activity will also fall, although to a lesser extent, in Colombia, by 2%; in Bolivia, -3.4%; in Peru, -4.7%; and in Chile, -3.3%, according to the projections of the WB.

Only the Dominican Republic will escape this trend and will not go into recession, although it is expected to close 2020 with flat growth of 0%.

Rama stressed that “the coronavirus pandemic is causing a major supply shock” so “demand from China and the G7 countries is expected to decline abruptly, impacting commodity exporting countries in South America and countries exporters of services and industrial goods in Central America and the Caribbean.

He also warned that “a collapse of tourism would have a very severe impact in some Caribbean countries.”

To help the most vulnerable to cope with these economic difficulties, the World Bank indicated that “current protection and social assistance programs must be rapidly expanded, as well as their coverage.”

In fact, he recommended that governments assume “most of the losses” and asserted “the socialization of these losses could demand a shareholding in financial institutions and strategic employers, through their recapitalization.”

The coronavirus pandemic that has the whole world on edge has caused 102,193 deaths, according to the global count of victims that has just been updated by the World Health Organization (WHO), an organization based in Geneva (Switzerland).

When the number of infected rises to 1,654,247 and just nine days after the first million cases were exceeded, the organization confirmed on Sunday that the symbolic barrier of 100,000 fatalities has been exceeded.

The pandemic incidence curves show stabilization in Europe and Asia, but not in America where the epidemic follows an upward trend, with more than 580,000 cases.

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