The International Monetary Fund foresees a “partial and uneven” recovery in Latin America after the Covid-19 crisis, and it anticipates that countries will take years to stabilize economically.
Geoffrey Okamoto, First Deputy Managing Director of the IMF, said that despite the coronavirus continuing to claim lives around the world, in economic terms the global situation is “less bad” than initially feared, particularly in advanced economies. But the picture is not homogeneous.
“I think Latin America is a good example of a partial and uneven recovery. It’s a kind of interesting microcosm of the rest of the world,” he said during a forum organized by the Center for Strategic and International Studies (CSIS) in Washington.
Okamoto estimated a 9% contraction of regional GDP in 2020, slightly below the 9.4% projected in June by the IMF. And he predicted a “partial recovery” for the region in 2021, although not all countries face the same reality.
Ecuador, Argentina, Bolivia, Peru and Mexico have been very affected economically by the Covid-19 crisis, while others, such as Costa Rica and Uruguay, “have been able to weather this quite well from an economic perspective,” he claimed.
The IMF has granted emergency aid to almost 80 countries, 20 of them in Latin America. And Okamoto said it remains ready to support the nations in need.
“We’re trying to preserve our financial firepower,” Okamoto said. “We’re talking about a return to growth that is going to take a few years, and many countries along the way that are probably going to need assistance.”
Costa Rica is among the countries that has received emergency aid, and the government has asked for an additional $1.75 billion in financial assistance from the IMF.
Latin America is the region most affected by the coronavirus, which emerged in China at the end of 2019. It accounts for 8.8 of the 31.6 million confirmed cases since then, and more than a third of the over 971,000 registered deaths.
The IMF’s new growth projections for the region will be announced in the next update of the World Economic Outlook (WEO), which will be released during the annual meeting of the IMF and the World Bank scheduled for October 12-18.