Projected economic growth in Latin America and the Caribbean in 2021 will not offset 2020 losses caused by the coronavirus pandemic, nor will it roll back increases in poverty and inequality, the UN said Wednesday.
In a 2021 “fiscal panorama” for the region, the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) also projected slow recovery in employment levels “that will not make up for the sharp job losses incurred last year.”
Women were hardest hit, it said, and their participation in the labor market suffered a 10-year setback.
The region reported an average loss of 7.1 percent of GDP in 2020 as the health crisis closed businesses and froze tourism.
Poverty rose to its highest level in 12 years and now affects more than a third of the population of Latin America and the Caribbean.
“The persistence of the pandemic, the asymmetries in the availability of vaccines and uncertainty about their effectiveness, along with the uneven and divergent paces of economic reactivation, cast doubt on the speed and sustainability of the economic recovery,” said the report.
As a result, the ECLAC urged governments to extend “fiscal measures” in 2021 to help mitigate the negative social and economic effects of the pandemic.
In 2020, it said, the region’s countries spent 4.6 percent of GDP on average on efforts to boost public health systems, support families and protect production.
The commission said Latin America and the Caribbean was the developing region most affected by the pandemic.
“The expansion of public spending to tend to the crisis along with the drop in tax collection entailed significant increases in fiscal deficits and debt levels in the region, with gross central government public debt averaging 56.3 percent of GDP,” it noted.
“Linking the emergency to the reactivation is essential,” said the ECLAC report, citing the need for sustainable and employment-intensive investments.