The new report from the Economic Commission for Latin America and the Caribbean (ECLAC) estimates that the Latin American economy will contract by 9.1% in 2020 due to the Covid-19 pandemic.

The UN organization based in Santiago (Chile), which estimated last April a regional recession of 5.3% this year, explained that although there are countries like Uruguay and Paraguay which have found "a certain normality" and lifted the containment measures, "others had to maintain them or even intensify them in the face of the persistent increase in new daily cases of the disease."

For CELPAC, this is the worst contraction in economic activity since data became available. It will result in a drop in the regional Gross Domestic Product (GDP) per capita to 2010 levels, with a drop of 9.9%.

The countries whose GDP will be the most affected will be Venezuela (-26%), Peru (-13%), Argentina (-10.5%), Brazil (-9.2%), Mexico ( -9%), Ecuador (-9%), El Salvador (-8.6%), Nicaragua (-8.3%), Cuba (-8%) and Chile (-7.9%).

For the other less affected countries are Panama (-6.5%), Honduras (-6.1%), Colombia (-5.6%), Costa Rica (-5.5%), Caribbean Islands (-5.4%), Dominican Republic (-5.3%), Bolivia (-5.2%), Haiti (-5%), Uruguay (-5 %), Guatemala (-4%) and Paraguay (-2.3%).

Note that the Dominican Republic, despite an estimated fall of 5.3% of its GDP should not have a negative performance, but close to zero and could remain the most dynamic economy in the area.

Employment indicators will also experience a significant deterioration. The number of unemployed will thus increase by 18 million compared to last year and will reach 44.1 million people.

Regarding poverty, the UN agency calculates that the rate will increase this year to 37.3%, and the number of people living in poverty will go from 185.5 million in 2019 to 230.9 million this year.

The biggest increases in the poverty rate will occur in Argentina, Brazil, Ecuador, Mexico and Peru, while extreme poverty will affect 28.5 million people.

SL/ HaitiLibre