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IMF predicts 3% World Recession

(IMF) updated economic forecasts for 2020 and 2021.

As a consequence of the COVID-19 pandemic, world GDP is expected to contract by 3% in 2020, more than that recorded with the 2008/2009 financial crisis.

The IMF expects that, if the pandemic ends in the second half of this year, in 2021 there will be a growth in the global economy of around 5.8%, thanks to the normalization of the main economic sectors, assisted by public policies to support production, investment and consumption.

According to the World Economic Outlook, revised in April 2020, the Latin America and Caribbean region is expected to face a recession of 5.2% in 2020, recovering the following year with growth of 3.4% – higher than the average for the years previous ones.
For individual countries, the IMF predicts:

Chile – contraction of 4.5% in 2020 and expansion of 5.3% in 2021;
Brazil – recession of 5.3% in 2020 and recovery of 2.9% in 2021;
Mexico – drop of 6.6% and increase of 3.0%;
Argentina – 5.7% recession and 4.4% growth;
Bolivia – 2.9% recession and 2.9% growth;
Colombia – 2.4% recession and 3.7% growth;
Ecuador – recession of 6.3%, and growth of 3.5%;
Paraguay – recession of 1.0% in 2020 and growth of 4.0%;
Peru – recession of 4.5%, and growth of 5.2%;
Uruguay – 4.5% recession and 5.0% growth;
Venezuela – 15% recession and new contraction of 5%.

For the Central America subregion, economic activity is expected to decrease by 3% in 2020 and expand by 4.1% in 2012.

Considering the analysis by Fitch Ratings (2020), although Latin America will inevitably suffer fiscal, economic and financial pressures due to lower demand for raw materials, goods and services, this region has a capital structure with the capacity to finance itself , not suffering acutely the consequences of the credit reduction.


Fitch Ratings. (2020). Coronavirus Impact on Latin American Utilities (Portfolio Screener) . Available in https://www.fitchratings.com/research/corporate-finance/coronavirus-impact-on-latin-american-utilities-portfolio-screener-10-04-2020 (Last accessed on April 17, 2020).
International Monetary Fund. (2020, April). World Economic Outlook . Available in https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020