Short-term shot and long-term healing for Latin America and the Caribbean – MENAFN.COM

Short-term shot and long-term healing for Latin America and the Caribbean – MENAFN.COM

By Alejandro Werner , Takuji Komatsuzaki , and Carlo Pizzinelli Growth in Latin America and the Caribbean recovered briskly in the second half of 2020, yet still more slowly than the global economy and other emerging markets. That's despite unprecedented policy support, strong performance of trading partners, soaring commodity prices and accommodative global financial conditions. The persistence of the health crisis in many countries casts a shadow on the near-term outlook. People and economies continue to require a short-term shot to exit from the COVID-19 crisis, while the aggravation of several underlying structural fragilities poses significant long-term challenges. The region's contraction of 7 percent in 2020 was the sharpest in the world, by far exceeding the global slowdown of 3. 3 percent. Growth for 2021 is projected at 4. 6 percent, well below the 5. 8 percent estimated for emerging markets excluding China. Income per capita will not catch up with its pre-pandemic level until 2024, resulting in a 30 percent cumulative loss relative to the pre-pandemic trend. Slow and divergent recovery The outlook , however, is subject to an extraordinary degree of uncertainty as the race between vaccines and the virus continues. On the upside, faster control of the