The economy of Latin America and the Caribbean will contract by 9.4 percent this year due to the Covid-19 pandemic, according to the International Monetary Fund (IMF)’s global macroeconomic perspectives report.
The region’s Gross Domestic Product (GDP) is expected to fall by more than five points compared to previous predictions, with an anticipated recovery of 3.7 percent the coming year.
IMF’s World Economic Outlook (WEO) Update, June 2020, published on website on Wednesday, projected that the global economy will shrink by 4.9 percent in 2020, 1.9 percentage points below its previous forecast.
The United States will see its economy contract by eight percent, the Eurozone by 10 percent, and Japan, by almost six percentage points.
China, on the other hand, is one of the few nations for which growth is forecasted, as it is expected to expand by one point in 2020.
According to the WEO Update said that the recovery from the impacts of the outbreak is projected to be more gradual than previously forecast.
Earlier, April 2020 WEO had predicted that a longer pandemic could cause a 3 per cent contraction of global economy in 2020.
In 2021 global growth is projected at 5.4 per cent.
“Overall, this would leave 2021 GDP some 6.5 percentage points lower than in the pre-COVID-19 projections of January 2020,” the June 2020 WEO said.
“The Covid-19 pandemic has pushed economies into a Great Seclusion, which has helped contain the virus and save lives, but has also triggered the worst recession since the Great Depression”, explained IMF chief economist Gita Gopinath, during the presentation of the report.
Gopinath said that over 75 percent of the countries are now reopening while the pandemic is intensifying in many emerging markets and developing economies.