By Isaac Cohen*
There are many coincidences in the reports issued recently, by the International Monetary Fund and the World Bank, on the economic situation and perspectives of the Latin American and Caribbean economies. For the Bank, last year the pandemic caused “devastation” in the region with an “anemic recovery path” foreseen for next year. For the Fund, the pandemic “still casts shadows on much of the region,” while it sees ahead “a long and winding road to recovery.”
For this year, both institutions project economic growth of 6.3 percent, which almost compensates the loss of 6.7 percent of 2020. For 2022, the Fund projects a decrease to 3 percent, while the Bank foresees slightly less, at 2.8 percent. Also, the Bank highlights the fact that the pandemic hit Latin America and the Caribbean at the end of another decade of slow growth, at a yearly average of 2.2 percent, which started in 2010.
Among the favorable external conditions sustaining the recovery, the Fund identifies the increase in commodity prices, which benefit exporters of oil, minerals, metals, and agricultural products. However, the recovery in the smaller economies of the Caribbean, dependent on tourism, will come until the return of international travel. By contrast, the economic reactivation in the United States and increased remittances are supporting the recovery of the Central American economies.
Finally, the Fund estimates “risks to the outlook are tilting downward,” mainly from the anticipated “tightening of global financial conditions,” or from another wave of contagion caused by a variant of the coronavirus.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.