Latin America will witness its worst recession ever due to the Covid-19 pandemic, with GDP falling by 5.3 percent in 2020, a United Nations agency announced Tuesday.
The United Nations Economic Commission for Latin America and the Caribbean said that the last time the region experienced "a similar contraction ... we must return to the Great Depression in 1930 (-5 percent) or even more so to 1914 (-4.9 percent)" And the beginning of the First World War.
Even before the Corona virus hit the global economy, the region experienced seven years of slow growth, averaging 0.4 percent from 2014 to 2019.
The UN Commission stated that in the whole region only the economy of the Dominican Republic will remain stable in 2020, while the economies of all other countries will be affected. The Venezuelan economy is expected to be the hardest hit, with a contraction of 18 percent, followed by Argentina, Mexico and Ecuador with 6.5 percent. Due to the contraction of its economy by 5.2 percent, South America will be more affected than Central America or the Caribbean "due to the fact that many countries are severely affected by the low activities of China, which is an important export market" for the countries of the region.
Central America, whose economy will shrink by 2.3 percent, is expected to suffer from "a decline in tourism and a decrease in activity with the United States, its main trading partner and the source of foreign remittances."
The Caribbean is also expected to face a decrease in tourism activity and a 2.5 percent decline in its gross domestic product.
The region’s committee said poverty in Latin America would rise from 30.3 percent to 34.7 percent, up 29 million people in 2020, while unemployment would jump from 8.1 percent to 11.5 percent, with 37.7 million people leaving the labor market.
"Exceptional measures are needed to deal with an unprecedented crisis. There will be no progress without international cooperation and solidarity," said Alicia Barcena, the commission´s executive secretary.
