Latin America and the Caribbean's (LAC) economy will contract by 8.1 percent this year as a result of the COVID-19 pandemic, but will then recover, growing by 3.6 percent in 2021, the International Monetary Fund (IMF) said on Thursday
MOSCOW (Pakistan Point News / Sputnik - 22nd October, 2020) Latin America and the Caribbean's (LAC) economy will contract by 8.1 percent this year as a result of the COVID-19 pandemic, but will then recover, growing by 3.6 percent in 2021, the International Monetary Fund (IMF) said on Thursday.
"Real GDP is expected to contract sharply in 2020, followed by a partial recovery in 2021. Reflecting deep recessions across the region, growth in LAC is projected at -8.1 percent in 2020 and 3.6 percent in 2021," the IMF said in its report Western Hemisphere: Pandemic Persistence Clouds the Recovery.
The Latin American countries are suffering from "a historic collapse" in economic activity in the second quarter of 2020, while Brazil, Chile, Colombia, Mexico and Peru have faced "larger quarterly GDP contractions than in any recession on record," the organization stressed.
"The strong recovery in remittances and exports, together with low oil prices, will contribute to a milder contraction in Central America, Panama, and the Dominican Republic, while tourism-dependent Caribbean countries will experience more severe recessions because of the sharp and long-lasting decline in tourism. After a steep and broad-based collapse in activity in the second quarter, regional GDP is expected to rebound in the second half of 2020 and continue a gradual recovery," the report read.
Last week, the IMF said in its World Economic Outlook that the global GDP would declinein 2020 less than previously expected and now is forecast to contract by 4.4 percent rather than 4.9 percent. However, the IMF has downgraded forecast for global economic recovery in 2021 to 5.2 percent.