RIO DE JANEIRO, BRAZIL – “After a sharp downturn in 2020, only a mild, multi-speed recovery is expected in Latin America and the Caribbean in 2021,” the Fund says in its new “World Economic Outlook” (WEO) report, released Tuesday, April 6.
In 2020, the Latin American regional economy plunged 7%, according to the latest calculations of the IMF, which in January had estimated a larger drop of 7.4%.
In their analysis, macroeconomic experts explain that the development expected for this year is largely due to the growth of large exporting countries in the region, such as Argentina, Brazil and Peru, which have been positively impacted by the rebound in global manufacturing in the second half of 2020.
Foreign trade in Latin America had its worst performance in 2020 since the Great Recession (2008) by plummeting 13%, but the drop was 10 points less than expected due to the rebound in demand in the region’s main partners, especially China, according to a study by the Economic Commission for Latin America and the Caribbean (ECLAC).
Thus, the three largest Latin American economies, Brazil, Mexico and Argentina, will grow this year by 3.7%, 5% and 5.8%, respectively, according to the IMF. Other Latin American countries, such as Colombia, Chile and Peru, will also advance 5.1%, 6.2% and 8.5%, respectively. On the other hand, Venezuela will suffer an economic contraction of 10%.
The IMF warns in its report that the longer-term outlook “remains dependent on the trajectory of the pandemic.”
“With a few exceptions – for example, Chile, Costa Rica or Mexico – most countries have not obtained enough vaccines to cover their populations,” the multilateral organization stresses in its report, which analyzes the economic outlook worldwide.
On the other hand, the 2021 projections for the Caribbean economies, mostly dependent on tourism, one of the sectors most affected by the coronavirus pandemic at the global level, have been revised downward by 1.5 points, to 2.4%.