Latam's Best-Scenario Growth Is 3.7% in 2021, World Bank Holds

The World Bank (WB) estimates that Latin America's Gross Domestic Product (GDP) could increase 3.7 percent in 2021 if the negative effects of the pandemic can be controlled.

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The best scenario for the region would be if restrictions are eased, commodity prices are stabilized, and external conditions improve. The regional growth, however, will be less than the 4 percent expected at the global level.

Peru will have the highest growth at 7.6 percent, followed by Panama with 5.1 percent. Argentina and Colombia are expected to register a 4.9 percent increase while the Dominican Republic and El Salvador will show numbers above 4.5 percent.

Mexico's GDP would increase by 3.7, and Brazil which experienced a fall of 4.5 percent in 2020, would rebound at a rate of 3 percent. 

The forecasts for this year were based on the assumption that COVID-19 national vaccination campaigns will expand. However, the WB warned that economic growth could decrease due to problems related to external debt and financing, social tensions, and the impossibility of containing the pandemic.

In 2020, the regional economy fell to record levels at  6.9 percent. The Peruvian economy was the hardest hit, with a 12 percent fall, followed by Argentina (10.6 percent), the Dominican Republic (10 percent), and Mexico (9 percent). 

Women and young people, who work in the tourism sector and personal services, were the most affected by job losses, along with low-income households. The Caribbean countries were the most affected by the economic downturn as their economy is based mainly on tourism.