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COVID-19 shocks point to recession in Latin America

Thursday, April 2, 2020

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.
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