Countries of Latin America and the Caribbean should register GDP growth of 5.2 percent on average in 2021, an improved forecast but not enough to offset coronavirus losses, a UN agency said Thursday.
The UN Economic Commission for Latin America and the Caribbean (ECLAC) upped its April forecast of 4.1 percent for 2021, which comes on the back of a 6.8 percent contraction in 2020 as the region of 33 countries was ravaged by the Covid-19 pandemic.
“This expansion, however, will not manage to ensure sustained growth, because the social impacts of the crisis and the structural problems in the region have deepened and will continue to do so during the recovery,” said an ECLAC report.
Projections for 2022 are for growth of 2.9 percent on average, “meaning a slowdown compared to the rebound in 2021,” said the agency.
“There is nothing to indicate that the low growth dynamic prior to 2020 is going to change,” it added.
Structural problems that held back growth prior to the pandemic have become more acute, said the ECLAC, and “this will have negative repercussions on the economic and labor market recovery despite the uptick in growth in 2021 and 2022.”
These problems include deep social inequality, low investment and lagging productivity.
In terms of per capita income, warned the report, “the region continues on a path toward a lost decade,” with the health crisis having worsened inequality and poverty.
ECLAC said the region had almost a third of the world’s coronavirus deaths despite representing just 8.4 percent of the global population, and most countries were lagging in vaccination efforts.
Poverty in the region now affects a third of people, and extreme poverty 12.5 percent.
In 2020, 44 million more people experienced food insecurity than the year before.