“COVID-19: Economic Reactivation In Latin America”
Courtesy of IMCO
On April 5, the Mexican government presented an economic revival plan in the face of the challenges posed by the COVID-19 pandemic. This plan is insufficient to protect families’ incomes, jobs and regain economic dynamism. In contrast, other Latin American countries have announced ambitious economic rescue plans that provide transfers to their citizens and protect companies, especially small and medium-sized ones.
The following is a general summary of the economic prospects and measures of some countries in the region. Mexico must observe and resume international lessons to improve its economic recovery plan.
What are Latin America’s economic prospects for COVID-19?
Mexico is at risk of being one of the countries most affected by an economic crisis related to the spread of the coronavirus. Not only is it a country poorly prepared to deal with the health crisis , it is also a country with a weak economic recovery plan.
The Mexican emergency plan, as it has been proposed, will be insufficient and compared to other countries it will not be able to mitigate the adverse effects on its productive and labor base, which will affect the well-being of families.
This risk materializes in the international economic and growth prospects. Those countries with better structured short-term economic rescue plans expect a smaller contraction than those, such as Mexico, which are not preparing adequately.
The Economic Commission for Latin America and the Caribbean (Eclac) indicates that the regional economic contraction will be no less than 3% or 4% of the gross domestic product (GDP) by 2020 (1) . The International Monetary Fund (IMF) projects a regional growth of -5.2% (2) . According to the most recent data from the IMF and the World Bank (3) , Mexico could experience a contraction of between -6 and -6.6% this year, while in countries such as Brazil, Peru and Colombia the negative effect of the economic crisis health over the economy will be less.