REGIONAL REPORT
The toll of the COVID crisis has been very heavy in Latin America
Forecast snapshots
The IMF has also produced forecasts and analysis for countries in the Latin American and Caribbean region over the last six-eight months . Below , we have included some selected snapshots as examples .
Mexico : It sees Mexico recovering quite quickly from the pandemic with growth at over six per cent in 2021 . Mexico may be currently buoyed by a very strong rebound in the U . S . and strong demand for goods , particularly in the U . S . where Mexico exports goods . Inflation expectations are still very well-anchored in Mexico .
Equador : The IMF estimates that the Ecuadorian economy will grow 3.5 % in 2022 . Ecuador suffered a tremendous contraction last year ( almost eight per cent ) and the pandemic hit hard with lives lost and very tragic outcomes . However , since the middle of last year , the IMF has seen ‘ a very broad-based recovery ’ in Ecuador . Reducing caseloads of COVID has helped , along with vaccination impact , and Ecuador is being buoyed by high oil prices and positive terms of trade , with ‘ quite strong growth in its trading partners .’
Brazil : The IMF forecasts that Brazilian GDP will be 1.5 per cent in 2021 and 2.1 per cent in 2026 . Effects are expected from the rising increase in monetary policy rates , given the high levels of inflation in Brazil , and because of the downward revision for the U . S . ( one of Brazil ’ s main trading partners ).
The IMF upgraded its forecast for Brazil in July . In the near term , it has been a very modest downgrade but , from a longer point of view , higher commodity prices and the return of manufacturing and services activity has been important for the recovery .
Panama : The IMF has forecast strong growth in Panama – it may be one of the fastest growing economies this year in the region . The country suffered a very sharp decline last year and the IMF is seeing ‘ a bounceback from those very low 2020 levels that were quite extraordinary .’
New subway lines are being built and construction has re-started which is boosting the economy . Copper mining is growing rapidly . The IMF has seen a pretty strong resurgence in global trade as large economies ( particularly the U . S . and Europe ) have shifted towards a lot more goods ’ and less services ’ consumption . This benefits Panama because of the canal activity .
Dominican Republic : As one of the fastest-growing and most dynamic economies in Latin America and the Caribbean , the Dominican Republic entered the COVID-19 crisis in a relatively strong position . The government has set a target of immunising 7.8 million people — over 70 per cent of the population .
Activity in most sectors was above pre-pandemic levels by early 2021 , supported by strong foreign investment and a buoyant U . S . economy . Remittances have also grown , supporting consumption . Tourism reopened but its recovery is expected to be more gradual as it depends upon the lifting of travel restrictions around the world . Total employment fell in 2020 but fully recovered in manufacturing by early 2021 .
El Salvador : The pandemic interrupted ten years of growth , but El Salvador ’ s economy has rebounded quickly . Robust external demand , resilient remittances and sound management of the pandemic — with the help of the IMF ’ s Rapid Financing Instrument approved in April 2020 — are supporting a strong recovery . Persistent fiscal deficits and high public debt service are leading to large and increasing gross fiscal financing needs .
The authorities deployed early-detection and containment measures in a timely and effective manner , ramped up COVID-19 testing and ICU bed capacity , and advanced a successful vaccination campaign ( 62 percent of population with two doses as of 17 November 2021 ). As a result , El Salvador — one of the most densely populated countries in Latin America — recorded one of the lowest rates of COVID-19 infections and fatalities in the region . By the third quarter of 2021 , industrial production , total employment and wages had reached pre-pandemic levels . The economy is projected to grow by about 10 per cent in 2021 and 3.2 percent in 2022 .
The Caribbean : “ In general across the region , the priority has to be investing in public health , expanding vaccinations and getting access to vaccinations . It will be key in the coming months to see how tourism develops through the winter months and how the economy performs this winter ,” said the IMF .
“ We are seeing some encouraging early signs that tourism is improving quite strongly . However , the pandemic left the region with much higher debt than it had before and a very difficult social situation . Now we ’ re seeing inflation , particularly food inflation , adding to those social strains ,” it added .
30 | sheetmetalplus . com | ISMR December 2021 / January 2022