World Bank raises its growth forecast for Latin America to 4.4%

RIO DE JANEIRO, BRAZIL – The economy of Latin America and the Caribbean, the most affected by the COVID-19 pandemic, will rebound by 4.4% in 2021 after last year’s 6.7% drop. However, it may enter an “accelerated” process that increases “inequality within and between countries”, the World Bank warned today in its half-yearly report on the region.

Thus, the agency slightly improves its latest forecasts, in which it predicted an expansion of the regional Gross Domestic Product (GDP) of 4% for 2021e after a 7.9% slump in 2020.

“This pandemic gave rise to a process of creative destruction that may result in faster growth but may also widen inequality within and between countries in the region,” said Martin Rama, the World Bank’s chief economist for Latin America and the Caribbean.

Panama and Peru are the countries that will experience the highest economic growth this year, with an expansion of 9.9% and 8.1%, respectively.

Argentina follows them with an estimated 6.4%, Chile with 5.5%, and Colombia with 5%, all of them above the regional average, while Brazil and Mexico, the two largest economies, will grow by 3% and 4.5%, respectively.

Among the encouraging elements for the region, the organization headed by David Malpass highlighted the recovery of raw material prices and the recovery of remittances sent by immigrants, which are an important economic support in Central America and the Caribbean.

The World Bank (WB), together with the International Monetary Fund (IMF), will hold its spring assembly next week, again virtually, to discuss global perspectives and challenges in the midst of the recovery from the deep crisis triggered by the pandemic.