macroeconomic impact

Growth prospects in the latin american economies

The Latin American countries that improved the most during the third quarter of 2020 are those that will continue to grow in 2021. Economic performance is influenced by previous growth, restrictions to avoid contagion from covid-19 and fiscal and monetary policies.

Costa Rica, Argentina, Jamaica, Ecuador and Chile had problems with large company exits, social unrest, dependence on the oil sector and tourism, making them the slowest rebounders in the third quarter of 2020. Mexico recovered a little less than half, the best performer among the least rebounding. Those that improved the most are Brazil, Nicaragua, Colombia and Peru.

The main risks to the 2021 improvement are: the evolution of the pandemic and vaccine availability; premature withdrawal of fiscal and monetary stimulus measures; global financial conditions allowing access to cheap financing; and the upward trend in commodity prices.

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The impact of the pandemic on the latin american economy

The stoppage of economic activities, caused by the covid1 pandemic, seriously affected Latin American economies during the first semester of 2020, 8 years of production were lost.

On average, Latin America lost eight years of production, while China lost only one, the United States six and the European Union 11. China, Europe, Argentina, Colombia, Bolivia, Ecuador, El Salvador, Honduras, Paraguay, Peru and the Dominican Republic imposed mandatory quarantine.

The economic outcome of the infection prevention policies has been strongly determined by the economic growth of the last decade. When economic dynamics are low, the fall, driven by the closure of internal and external economic activities, causes a large contraction measured in terms of years of product. If the dynamics are high, a large fall leads only to a low reduction in production.

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