Latin America’s economy to shrink by 7.6% due to COVID-19

LatamList – Economists at Goldman Sachs predict a 7.6% reduction in the Latin American economy this year. In light of social distancing and corresponding restrictions of the COVID-19 pandemic, the economic damage to the region is severe.

The COVID-19 pandemic means that many businesses ceased operations and furloughed their staff, resulting in major economic losses. Goldman Sachs economists also warned of long-term damage to the labor market and productive capacity of the economy as the region begins to recover.

“The bulk of physical restrictions on activity and social distancing protocol will remain in place through May and will start to be gradually eased through June-July. This extension will generate a deeper, longer-lasting effect on real activity,” Goldman estimates.

Brazil’s GDP is expected to fall by 7.4%, and Mexico and Argentina’s by 8.5%. Most economies in the region are unlikely to recover until 2022-23 due to uncertainty of how and when markets can reopen, with the exception of Chile.

Read more on The New York Times.

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