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  • IMF director Kristalina Georgieva in Washington, U.S, April 15, 2020.

    IMF director Kristalina Georgieva in Washington, U.S, April 15, 2020. | Photo: EFE

Published 7 July 2020
Opinion

The region’s gross domestic product could shrink by 9 to 10 percent this year.

Latin America’s essential productive activities will take several years to fully recover since all economies in the region are experiencing a recessionary impact derived from COVID-19.

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Analyses predict that these economies will end up in 2020 as the world’s worst affected by the pandemic.

Moody's Analytics Director Alfredo Coutiño stated to Xinhua that the most damaged areas will be tourism, commodities trade, and each country’s general industries, especially those highly dependent on imported inputs.

"The most affected will be those more vulnerable in both the public health system and economy, including Brazil, Mexico, Argentina, Peru, Ecuador, and Central American countries," Coutiño said.

Less than a month ago, the International Monetary Fund (IMF) predicted a 9,4 percent shrink in Latin America.  Nevertheless, experts estimate that the region's GDP could shrink by 9 to 10 percent this year, dragged down by falls in Brazil and Mexico, whose economies represent about 60 percent of the regional output.

The Economic Commission for Latin America and the Caribbean (ECLAC) forecasted the closure of some 2.7 million companies, which would mean the loss of 8.5 million jobs over the next six months.

Latin America also faces persistent risks related to natural disasters and weather-related events, including the upcoming hurricane season in the Caribbean.

"The region is condemned to suffer... a short term deep recession and a medium-term loss of productive capacity, that will affect the recovery speed of Latam economies, given the physical and human capital destruction derived from the pandemic," Coutiño warned.

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