COVID-19 shocks point to recession in Latin America

Subject

The economic impact of COVID-19.

Significance

COVID-19 arrived in Latin America relatively late, but the response from governments has been mixed, and cases are now rising exponentially. The region faces multiple economic shocks: to domestic economic activity, export demand, tourism, commodity prices and financial conditions. Following years of weak economic performance, there is limited space for fiscal and monetary stimulus.

Impacts

• New waves of unrest could follow a recession, particularly if governments are seen to have mishandled the crisis.
• Leaders who have downplayed the threat from coronavirus and been slow to act could face a backlash as the crisis deepens.
• Venezuela is particularly vulnerable to a pandemic.