COVID-19 will drive record Latin America recession
Latin America is now the global hotspot for the pandemic, with over 2mn cases and 100,000 deaths
Source: European Centre for Disease Prevention and Control; IMF; Pew Research Center; World Bank
Outlook
The world’s most urbanised and unequal region, Latin America is struggling to contain the spread of COVID-19, especially in urban slum areas also hardest hit economically by lockdowns.
In April the IMF estimated a 2020 regional contraction of 5.2%. It now estimates a fall of 9.4% and a rebound of only 3.7% in 2021.
Despite increasing economic damage and the apparent failure to halt the pandemic, in part given population density and the difficulty of halting movement in large informal economies, governments have limited options to ease lockdowns, with case numbers rising sharply and the peak still weeks away.
Impacts
- Popular acceptance of lockdowns will become increasingly frayed as the impact on livelihoods deepens.
- The socio-economic fallout from the pandemic will worsen existing deep levels of poverty and inequality.
- Global recession will worsen the effect: remittances to the region may fall by 19%, compared to 11% in 2009.
- Regional governments lack the financial firepower to supply sufficient social aid or economic stimulus.
See also
- Foreign investment fall will continue in Latin America - Dec 14, 2020
- Arce is on course for a landslide win in Bolivia - Oct 20, 2020
- Latin America risks another lost decade - Oct 5, 2020
- COVID-19 gains pace despite Latin America lockdowns - Sep 1, 2020
- Guatemala’s economy looks set to bounce back next year - Aug 28, 2020
- Easing risks wider COVID-19 crisis in the Americas - Aug 26, 2020
- Argentine-Mexico vaccine deal could expedite roll-out - Aug 13, 2020
- Recovery plan will need to follow Argentine debt deal - Aug 7, 2020
- Rising virus cases will delay Latin American recovery - Jul 31, 2020
- Social costs of dollarisation will be high in Cuba - Jul 28, 2020
- Pension plan will help Mexico's formal employees - Jul 23, 2020
- Pandemic-induced crisis will deepen in Latin America - Jul 16, 2020
- Mexico’s auto industry faces dual challenges - Jul 15, 2020
- Latin America food insecurity will rise amid slowdown - Jul 14, 2020
- COVID-19 impact limits Latin America response options - Jul 8, 2020
- Argentina debt offer will get mixed reception - Jul 8, 2020
- Abinader faces major challenges in Dominican Republic - Jul 7, 2020
- Airlines will struggle to recover in Latin America - Jul 1, 2020
- Prospects for Argentina to end-2020 - Jun 24, 2020
- Prospects for Mexico to end-2020 - Jun 15, 2020
- COVID-19 impacts will cut Latin American remittances - Jun 11, 2020
- Prospects for Brazil to end-2020 - Jun 10, 2020
- More graphic analysis