Economic Research: For Latin America, The Path To Economic Recovery From COVID-19 Remains Uncertain
April 14, 2020
Article by: Elijah Oliveros-Rosen
- “The COVID-19 outbreak, and its associated economic and financial implications, will push Latin America into a recession in 2020, recording its weakest growth since the Global Financial Crisis (GFC). We forecast Latin America’s GDP to contract 1.3% in 2020, and then, bounce back to 2.7% growth in 2021.
- While we believe that the depth of the recession could be on par, or potentially worse, for some Latin American economies than during the GFC, we expect the length of the recession will be much shorter: two quarters versus six quarters during the GFC.
- Risks are firmly to the downside as inadequate or delayed policy implementation could lengthen the health crisis and postpone the economic recovery we had expected across the region.
- We see a higher risk of a prolonged crisis in Mexico due to the slow public health response to the pandemic combined with pre-outbreak weak investment dynamics.”
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