The economic impact of covid-19 in Latin America
Alejandro Werner, Director of the Western Hemisphere Department of the International Monetary Fund (IMF), writes this post “Outlook for Latin America and the Caribbean: An Intensifying Pandemic” at the IMF blog after the recent publication of the IMF´s World Economic Outlook Update.
The article describes the current situation of the Latin America and the Caribbean region which “have become the new covid-19 global epicenter” with negative implications for its economic outlook. In fact, the latest IMF´s World Economic Outlook Update from June 2020 now estimates “the region to shrink by 9.4% in 2020, four percentage points worse than the April projection and the worst recession on record”.
In this situation, the IMF director considers the following measures as priorities:
- “Fiscal policy”: Reprioritizing expenditure and increasing its efficiency to continue protecting lives and livelihoods to reach different segments of society, especially where informality is high. Due to the likely increase in Public debt “commitment to a medium-term plan of fiscal consolidation and growth-enhancing structural reforms will be key to mitigate sustainability concerns”.
- “Monetary policy”: It should remain accommodative, with additional policy rate cuts where possible, to support economic activity and to ensure proper functioning of financial markets.
- “Measures to maintain employment relationships”: Payroll support and financing of working capital to SMES and corporates, and investments to increase potential growth will be positive for the economic recovery along with the implementation of “containment and mitigation policies” to manage localized outbreaks in the future.
Filter results
According to IE University’s Center for the Governance of Change, deeper and more integrated financial markets would strengthen the euro’s global role. This requires, among other elements, resilient and interoperable payment systems and completing the banking union.
Partnerships between banks and private credit: The winners will be those that combine bank underwriting discipline, distribution, and customer access with private capital’s appetite for long-dated, illiquid risk, according to Oliver Wyman.
Lucrezia Reichlin (CEPR): A CBDC is not a prerequisite for monetary sovereignty. Confusing money with payments can risk misdiagnosing the problem and misaligning economic policy efforts.
According to the World Economic Forum´s Global Risk Report 2026, geoeconomic confrontation, mis- and disinformation and societal polarization make up the top three short-term risks, while environmental risks dominate in the long term.
According to the World Economic Forum, over the last few years AI has moved from experimentation to workflow integration, promising systemic gains in productivity while also raising critical questions around economic inclusion, values, trust and resilience.
According to AFME, a clearer, more coherent, and proportionate regulatory environment, without unnecessary layers and focuses on growth and competitiveness, is keyl to increase investor confidence, unlock private capital and deepen European capital markets
According to the Center for the Governance of Change at IE University, Europeans support technological progress if it reinforces security, inclusion, and social welfare; but resist it when change feels imposed, opaque, or misaligned with their values.
According to a recent report released by CEPS, European financial regulators should adopt competitiveness as a formal secondary objective, following the precedent established by the UK's Financial Services and Markets Act 2023.
According to the OECD. SMEs and start-ups that grow rapidly contribute significantly to job creation, economic growth and competitiveness. Indeed, SMEs that grow by one-third over a three-year period, contribute about as much to job creation as large firms.
According to @McKinsey, banks must prepare for a new growth curve. Strategic precision —the ability to combine technology, capital discipline, and deep customer insight— will distinguish the leaders from the laggards.
According to Kristalina Georgeva IMF Managing Director, lifting growth requires three things: one, regulatory housecleaning to unleash private enterprise; two, deeper regional integration; and three, preparedness to harness AI.
According to The European House – Ambrosetti, the European Union has an opportunity to boost competitiveness and growth by simplifying regulatory and supervisory frameworks, particularly in the areas of sustainability and the financial sector.