RIO DE JANEIRO, BRAZIL – Countries of Latin America and the Caribbean must continue to ratchet up stimulus to beat back the devastating economic impacts of the coronavirus pandemic, the UN agency ECLAC said in a report issued this week.
The Economic Commission for Latin America and the Caribbean (ECLAC) urged governments to seek out financing to underwrite the programs necessary to fight spiking poverty and unemployment.
“National efforts must be accompanied by a greater mobilization of external resources, through access to… financing under favorable conditions, both in international markets and by international financial institutions,” the report said.
The pandemic has hit Latin America especially hard, driving its economy this year to a predicted contraction of 9.1 percent, the worst since recordkeeping began in 1900, ECLAC said in July.
The agency said in its report that a full recovery hinged on the region’s nations maintaining “expansionary fiscal and monetary policies” to boost demand and stave off shocks to the exchange rates and capital flows.
Overall, the agency predicted public spending in the region would jump to 25.4 percent of GDP, up from 21.7 percent observed in 2019, the report said.
Stagnating labor markets, a drop in savings and a sharp fall in remittances – a critical source of income for families in some of the region’s economies – are likely to remain wildcards, however.
“The consequences that this will leave in terms of unemployment and poverty among migrants and their families in their countries of origin will take years to recover to pre-pandemic levels,” the agency said.