By Isaac Cohen*
The head of the Western Hemisphere Department of the International Monetary Fund, Alejandro Werner presented, last week, an update of the Regional Economic Outlook for Latin America and the Caribbean, including last year’s performance and the perspectives for this year. https://blogs.imf.org/2021/02/08/latin-america-and-caribbeans-winding-road-to-recovery/?cid=em-COM-123-42627
At the start of last year, the Fund says, the Latin American and Caribbean economies were able to withstand the initial pandemic shock. However, by the end of 2020 contagion returned more forcefully, which led to the intensification of social distancing and more lockdowns of economic activities. By the end of the year, the Fund estimates in the region more than 16 million persons have fallen into poverty, while 18 million have been infected and half a million have perished.
The Fund’s projections for this year are more positive. By contrast with the fall in regional economic growth, estimated at -7.4 percent, in 2021 the projections are less distressing, anticipating 4.1 percent growth. This year’s projection is based on the expectation of expanding vaccinations, a better growth outlook in the United States and higher prices for some commodities.
At the policy level, in contrast to the austerity the Fund advises in the good times, governments now should increase funding for health care and the measures to support the most vulnerable sectors. Specifically, the Fund warns that expansionary fiscal and monetary measures should not be withdrawn prematurely. Finally, the Fund revealed it has supported financially 21 governments of the region, providing over $61 billion, equivalent to two thirds of the emergency liquidity approved for all member governments.
*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.