The International Monetary Fund (IMF) warned of a dark scenario for economic recovery in Latin America and the Caribbean (LATAM) due to the persistence of the COVID-19 pandemic.
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IMF officials highlighted that the region experienced the world's sharpest economic contraction at 7 percent last year. Despite a 4.6 percent recovery expected in 2021, the region will not bounce back the pre-pandemic levels.
In Central America, improvement in gross domestic product indicators will not be possible until 2022, while the Caribbean economies will be the last to recover in 2024 due to the slow resumption of the tourism sector.
The IMF also forecast that the population living in poverty in LATAM will increase by 20 million this year.
The increase in international interest rates and labor market fragility are risk factors for the regional recovery as financial volatility could impact several countries.
IMF officials also lamented that the deterioration of human capital due to school closures is one of the greatest consequences of the pandemic in LATAM.
"After the pandemic, LATAM will most likely face situations that include higher debt, greater poverty, educational problems, destruction of operating capital at the corporate level, which will generate problems for recovery," IMF official Alejandro Werner said.