By Isaac Cohen*
Before the pandemic reached Latin America and the Caribbean, a bit later than in the advanced economies and China, the region was already undergoing meager economic growth, due to the end in 2014 of what was known as the super-cycle in commodity prices. Therefore, the long-term prospects were weak, with average yearly growth rates projected to remain under 2 percent, as those which started in 2015.
In that context should be pondered the consequences of the pandemic shock described the International Monetary Fund as “an unparalleled health crisis” together with “a historic contraction.” These are the terms in which the Fund’s last Regional Economic Outlook for the Western Hemisphere characterized the scope and magnitude of the contraction caused by the initial effort to control the spread of the virus. According to the Fund, by the end of September, with 8.2 percent of the world population (640 million people), Latin America and the Caribbean had 28 percent of all COVID19 cases (9.3 million) and 34 percent of all deaths (341,000).
The Regional Outlook was presented in Washington, last week during the Monetary Fund and the World Bank virtual annual meetings, by the Director of the Western Hemisphere Department, Alejandro Werner. https://www.imf.org/en/News/Articles/2020/10/23/tr102220-transcript-of-october-2020-western-hemisphere-regional-economic-outlook-press-briefing?cid=em-COM-123-42187
Depending on the evolution of the pandemic, Real GDP growth for the region is projected to contract 8.1 percent in 2020, followed by a mild recovery in 2021.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, TELEMUNDO, UNIVISION and other media.