Madrid
Once, the World Bank lowered its forecast for Latin American and Caribbean economies from an estimated contraction of 7. 2% in June to 7. 9% today.
The most recent report on the region’s macroeconomic outlook, with more than 33% of global deaths, Latin America and the Caribbean, is now the regions most affected by the Covid-19 pandemic. where Latin American economies are affected by declining external demand, increased economic uncertainty, a collapse in tourism and the consequences of months of confinement.
“Our region is experiencing the impact of Covid-19 on the world, which requires greater clarity on how to combat the pandemic and return to an immediate recovery,” the World Bank report notes. Vice President for the Region of Latin America and the Caribbean Carlos Felipe Jaramillo.
Among the most affected economies, several Caribbean islands stand out for their dependence on tourism, such as St. Lucia (-18%), Belize (-17. 3%), Bahamas (-14. 5%), Suriname (-13%), as is the case in Mexico (-10%), also highly dependent on tourism activity.
On the other hand, forecasts for the main economies of the region show significant falls, of very different magnitude between countries, so Brazil will contract by 5. 4%, Argentina will sink by 12. 3%, Colombia will fall by 7. 2% and Chile by 6. 3%. .
For the minor decreases, Haiti (-3. 1%), Paraguay (-3. 2%), Uruguay (-4%) Dominican Republic (-4. 3%) 5%, with Costa Rica (-5. 4%), Bolivia (-7. 3%) Ecuador (-11%).
Guyana is the country with a positive expansion projection of 23. 2%, taking into account the country’s oil field discoveries.
In addition to the effect of the pandemic, there have been several years of slow expansion in the region, falling 0. 2% in 2019 and expanding 1. 4% in 2018 and 1% in 2017, as well as little progress in terms of social indicators. and a wave of social unrest in many countries in the region, such as Chile.
On the other hand, containment measures were disproportionately distributed given the highest informality rate in the region, estimated at more than 50%, so the World Bank reaffirms the need for policies that publicize formalization, penalizing the creation of “indispensable” tasks.
In this regard, it suggests that detailed social records would help money transfers succeed in making more people live on a basis.
The firm also anticipates that the pandemic will continue for a long time, so conditioning systems deserve reforms to improve power and lower prices for governments and individuals. Governments will also want to locate tactics to resume fiscal consolidation after an era of high spending on the economy. Emergency social recovery and transfers.
4% GROWTH FORECAST FOR 2021
The outlook for next year points to a recovery of 4% of the region’s GDP, which improves past forecast by 2. 8% as, “despite the bleak picture, there are signs that the effect may be less severe than the first all feared.
Among the points of this improvement, the global goods industry is returning to pre-crisis levels and commodity costs have remained relatively well. Moreover, remittances are sometimes higher than they were a year ago and few countries cannot access foreign money markets.
However, the estimated expansion for countries in 2021 goes from covering the decline they will face this year.
Countries with the highest economic recovery will be Saint Lucia (8. 1%), Peru (7. 6%), Belize (7. 4%) Guyana (7. 8%), all with expansion rates above 7%.
Moderate maximum recoveries will be Suriname (1. 5%), Haiti (1. 1%) Nicaragua (1. 1%), while the main economies of the region, Brazil (3%), Chile (4. 2%), Colombia (4. 5%), Argentina (5. 5%). %) Mexico (3. 7%) will grow to less than 6%.
On the other hand, the forecast for 2022 in the region is 2. 8% growth.
The World Bank stresses the importance of government-led stimulus packages, which are sometimes physically powerful despite budgetary constraints, and that many of the additional resources have been earmarked for social transfers. “The multiplier effect of these transfers on economic activity is significant,” says the establishment.
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