The Economic Commission for Latin America and the Caribbean (ECLAC) warned on Tuesday that countries in the region would have to maintain or increase the fiscal expending and stimulus policies to overcome the COVID-19 pandemic impact.
ECLAC: Latam Goods And Exports To Decrease By 23 Percent
ECLAC's latest report highlights that the region is experiencing the worse economic crisis in a century, and recovery to the pre-crisis levels will be slower than the 2007-2008 recession.
In this sense, the organization explained that governments would have to continue applying and enhancing protection policies as some 2.7 million businesses are expected to close in 2020, and unemployment is estimated to reach 44 million, about 18 million more than 2019. This as it is forecasted that poverty will expand to 231 million people in 2020.
"Public revenue must be strengthened, conventional and non-conventional expansionary monetary policies must be maintained, and macroprudential regulation must be bolstered along with the regulation of capital flows to preserve macro-financial stability in the short and medium-term," advised ECLAC's Executive-Secretary Alicia Bárcena.
Moreover, the organization proposed that "multilateral credit institutions must expand their financing capacity and liquidity, including for the long term." This to create a "financial safety net" at a global and regional level "to counteract volatility in finance flows during crises."
"Countries must orient public spending towards reactivation and economic transformation, strengthening public investment in sectors that foster employment, gender parity, social inclusion, productive transformation, and an egalitarian transition towards environmental sustainability," the official stressed.