COVID-19: UN experts warn of possible recession in Latin America

Amidst the coronavirus pandemic, Latin America might be heading into a ‘deep recession’ this year. According to reports, the UN economic commission for the region on April 3 stated that they expected a drop in the region’s GDP. Even before the pandemic, Latin America’s economy was struggling with a growth rate of only 0.1 per cent in 2019.

Multiple factors causing a possible recession

As per reports, Alicia Barcena, executive secretary of the UN Economic Commission for Latin America and the Caribbean (CEPAL) has claimed that Latin America is at the beginning of a profound recession and due to the coronavirus pandemic, the region may suffer from the largest fall in growth ever. Due to the continued escalation of the virus, the region’s main stock markets have suffered drastic losses and as a result, several Latin American currencies have plunged when compared to the US dollar.

According to reports, there are several factors that have contributed to a possible recession in the future. A reduction in economic activity due to several lockdowns and restrictive measures adopted in order to contain the virus, drop in the value of raw materials and a severe blow to the tourism industry.

Read: Coronavirus Hits Rich And Poor Unequally In Latin America

Read: COVID-19: Over 154 Million Children In Latin America, The Caribbean Left Out Of Schools

In the face of this crisis, Peru has reportedly announced that it would guarantee new bank loans to 350,000 business worth $8.5 billion so the businesses can continue to pay staff and suppliers. Venezuela, on the other hand, has decided to announce a ‘special plan’ to tackle the fuel shortage due to the coronavirus outbreak and US sanctions. The measures in the ‘special plan’ have not been revealed but it aims to guarantee the mobility of priority sectors.

According to the latest report, coronavirus pandemic has already affected over 1,118,059 people across the world, out of which around 59,206 have been unable to survive and over 229,000 have fortunately recovered. UN agency has been continuously warning people of the escalating situation and people have to ask to stay isolated at home. Children have been barred from schools and colleges, in order to maintain social distancing, even if that requires them to risk their educational and psychological well-being. 

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