The upsurge of the pandemic in the region threatens to hinder growth.
The International Monetary Fund (IMF) revised the forecasted growth of the Peruvian economy for this year from 7.3% to 9%.
The multilateral entity warned that the upsurge of the pandemic in Latin America threatens to “frustrate a recovery that is already uneven” and that, despite the improved outlook, consumption and investment are lagged behind.
In the midst of the crisis, the IMF increased its estimate of the region’s performance for 2020, from an economic downturn of 8.1% to a Gross Domestic Product (GDP) decrease of 7.4%, but yesterday several economists warned in a post on the fund’s blog that “full recovery is still very far off.”
On January 26, the IMF updated its outlook for the region in 2021, with a forecasted growth of 4.1%, with an upward revision of the large economies, Brazil and Mexico, which will have an increase of 3.6% and 4.3%, respectively.
These figures are below the expected growth of 5.5% for the global economy in 2021.
The agency forecasts that Argentina will emerge from recession in 2021 with a growth of 4.5%, but such performance is 0.4 percentage points below that projected by the agency in October.
On the other hand, as for Chile, the multilateral agency forecasts an economic growth of 5.8%, above the 4.5% GDP growth forecasted in its last report.
As for Colombia, a 4.6% growth was forecasted, 0.6 percentage points above its earlier forecasts.
As for Perú, the IMF estimated a 9% growth, a significant growth since the 7.3% in the previous report.
“The region’s product will return to pre-pandemic levels only in 2023, and the GDP per capita will do so in 2025, that is, later than other regions of the world,” stated the IMF’s Director for the Americas, Alejandro Werner, and two other economists in an article published on the IMF website.
The agency also pointed out that the crisis had a “disproportionate” impact on employment, and job losses have mainly involved women, young people and informal and less qualified workers.
“As long as there is no reduction in COVID-19 infections, especially in deaths and in the demand for hospital capacity in Latin America in the second quarter of this year, but especially in the second half of this year, the expected recovery will obviously be at risk,” said Werner.