IMF TELLS LAT-AM, CARIBBEAN ECONOMIES: THE ROAD AHEAD IS ROUGH

Latin American and Caribbean economic activity will not return to pre-pandemic levels of output until 2023 and GDP per capita will catch up only in 2025, later than other parts of the world, the International Monetary Fund (IMF) said.

Among contributing factors, the IMF listed a failure to contain new COVID-19 infections, the imposition of new coronavirus lockdowns and changes in people’s behavior.

“The pandemic’s resurgence towards the end of the year threatens to thwart an uneven recovery and add to the steep social and human costs,” the IMF’s economists said in a blog post, Rodrigo Campos reported for Reuters.

The IMF said a weak rebound in labor markets would cause more permanent social damage while changes in international investor sentiment “would put pressure on countries with fiscal and external vulnerabilities.”

Last week the IMF’s managing director, Kristalina Georgieva, said that rising debt in the region was not the fund’s main concern.

“What we’re urging in Latin America is, please concentrate on the reforms that would bring more vibrancy to growth,” she said.

The most recent IMF projections forecast GDP across Latin America and the Caribbean to grow by 4.1% in 2021 and 2.9% in 2022.

Peru is expected to achieve among the strongest rebounds in the region, with its economy projected to grow by 9% this year and 5.2% in 2022.

The fund on Monday praised countries’ commitment to containing the COVID-19 pandemic, saying that “additional fiscal support would create the conditions for a faster recovery.”

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