Latin America and the Caribbean will suffer “the worst economic and health impact” in the world from the covid-19 pandemic, according to the World Bank, which published an estimate that predicts a GDP drop of 7.9% in 2020.
“Our region bears the worst economic and health impact due to COVID-19 in the world,” said the World Bank’s vice president for the region, Carlos Felipe Jaramillo. After the coup, Latin America will start a recovery with an estimated growth of 4% in 2021.
This report shows a slightly more negative outlook for this year than in the forecasts made by the entity in June, when it calculated a contraction of 7.2% in 2020.
These data do not include Venezuela, a country in acute recession for several years and with a political crisis and a government unknown by more than 50 countries.
In its report “The cost of staying healthy”, the Bank addresses the impact of the pandemic in a region with highly populated countries and high rates of mortality and infections such as Brazil, Mexico and Peru.
In Latin America and the Caribbean “the death toll per million people is as high as in advanced economies, if not higher, but the resources available to deal with the coup are much more restricted.”
“It is possible that the vaccine will not be within a few months, it may take years before there are effective vaccines,” explained the WB’s chief economist for Latin America and the Caribbean, Martín Rama, at a press conference.
“What started as a ‘sprint’ is turning into a marathon,” added the Uruguayan economist.
– “Lost time and a cost in lives” –
This crisis comes “after several years of disappointing growth and limited progress on social indicators,” the bank said.
The World Bank warned that “the social damage is immense” and that unemployment rates have risen in the region, sometimes substantially.
In 13 countries “the percentage of households that suffered a decline in income is even higher than those who experienced a job loss,” according to a survey carried out by the entity.
WB economists also pointed out that in five countries, a large number of people said they were behind in their payments or think they may have difficulties in meeting their commitments.
For the World Bank, this suggests that the impact of the crisis will not only be “severe” but “potentially long-lasting.”
“In general our expectation is relatively optimistic that next year is a year of strong growth,” said Rama, noting that “there is lost time and a huge cost in lives”