* TABLE-IMF projections for the economies of Latin America and the Caribbean in 2020 and 2021
Jun 26 (.) – The rapid spread of the coronavirus pandemic in Latin America, one of the critical points of the disease in the world, will continue to have an impact on the region’s economy and will have consequences in the future, the Monetary Fund said on Friday. International (IMF).
In a section of its World Economic Outlook report, published this week, the agency warned that countries should be cautious when resuming activity, given that the high rates of informality in Latin America and the Caribbean leaves them little prepared to deal with outbreaks of COVID-19.
The Fund confirmed that it expects a regional contraction of 9.4% this year, « four percentage points more than expected in April and the worst regional recession since data are available », although it stressed that the bloc’s GDP will show growth of 3 , 7% next year.
Activity in the main economies -Brazil, Mexico and Argentina- will roll back 9.1%, 10.5% and 9.9%, respectively.
« The pandemic could worsen, depressing economic activity, pressing corporate balance sheets, worsening poverty and inequality, and reviving social tensions in the region, » Alejandro Werner, IMF director for the Western Hemisphere, said in the report.
The most recent data from the entity also project a substantial downward revision in the projection for Peru, whose production and demand were strongly shaken by restrictions to curb the pandemic. The country would contract almost 14% this year, with a gradual rebound in the second half and an advance of 6.5% in 2021, he added.
In Colombia, where early steps were also taken to contain the virus, the economy would shrink 7.8% this year to rebound 4% in 2021, provided the situation stabilizes, the IMF said.
Meanwhile, Chile’s real GDP would decrease by 7.5% in 2020, as an abrupt contraction is estimated in the second quarter due to the effects of social distancing and, to a lesser extent, due to a drop in external demand. The world’s leading copper producer would grow 5% in 2021, the institution said.
The report emphasized the need to maintain ultra-expansive monetary policy, « given low inflationary pressures, negative output gaps and high unemployment » and fiscal measures designed to continue protecting families’ lives and income.
(Report by Marion Giraldo via Editing Table in Spanish, Edited by Manuel Farías)