The double stress of Latin America: focus of Covid19 and sharp decline in their economies

The data for the immediate future of the countries of Latin America and the Caribbean are not encouraging. On the one hand, the region is considered today the largest focus of Covid19 in the world and on the other, the World Bank has just sentenced the worst economic fall in many years.

The following classification delivered today by the multi-lateral body, says it all:

Stressful second semester

Risks to the growth outlook for LAC are firmly to the downside, many of them stemming from the COVID-19 pandemic, the report of the Banco Mudial points out.

A continued acceleration of COVID-19 cases in the second half of the year would further stress domestic health systems, with the risk of high fatality rates in countries with low capacity to manage a large outbreak.

It is also possible that outbreaks in large regional economies will generate intra-regional economic spillovers in addition to those from advanced economies—for Central America through trade and remittance channels with Mexico; for Argentina and Paraguay through trade channels with Brazil; and for Brazil, Bolivia, Paraguay, and Uruguay through trade and remittance channels with Argentina.

Moreover, a renewed wave of COVID-19 outbreaks in major global economies could prolong the negative global spillovers the region has experienced in recent months.