World Bank anticipates that Chile will grow more than Latin America

05/01/2021

Ten of the countries with the most cases of coronavirus per capita globally are in Latin America. The World Bank emphasizes this fact in its latest report, where it assures that the region is one of the most affected by the pandemic, both at the health and economic levels, which leads to the estimate of a contraction of 6.9% for last year, followed by a rebound of 3.7% in the current year.

The figures, fortunately, are more auspicious at the national level. In a report that updates its global perspectives, the multilateral organization decided to maintain the projections for Chile, anticipating a contraction of 6.3% for 2020 and a rebound of 4.2% in 2021.

This is a performance that this year does not stand out particularly when compared to the main regional economies. Although it exceeds the 3% expansion expected for Brazil, the South American giant would suffer in 2020 from a fall in GDP lower than the national one, of 4.5%.

Meanwhile, the rebound that Peru, Argentina, and Colombia will experience, of 7.6%, 6.9%, and 4.9%, although far beyond the national perspectives, is due to the economic collapse of great proportions that precedes them. Peruvians will see a 12% collapse; Argentines 20.3% and Colombians 7.5% in their gross domestic product by 2020. However, at the Latin American level, it is Mexico that takes the worst part, with a drop of 9% followed by a limited rebound of 3% this year.

The WB stresses that by 2021 "the risks to the outlook are weighted down", because "activity could be slowed by the lack of control of the pandemic, tensions related to debt and external financing, the resurgence of social unrest, deeper economic damage than expected from the pandemic and disruptions related to climate change and natural disasters.

Global Overview

Meanwhile, at the global level, while the institution improves the outlook for 2020 from 5.2% to 4.3%, it worsens it slightly by 2021 from 4.2% to 4%. "The incipient recovery was initially supported by a partial easing of strict blockades. However, several restrictive measures have been reintroduced, as COVID-19 has continued to spread throughout the world," the report highlights.

While the institution recognizes the relevance of vaccine development, they emphasize that until they are "widely distributed, effective containment strategies to limit the spread of COVID-19 remain critical.

Nevertheless, it is worth noting that the two largest economies in the world are more or less successful in weathering the crisis. The United States will see a 3.6% drop in 2020, and then rebound with 3.5% growth this year. For its part, China is one of the few global economies that manages to stay on positive ground, with increases of 2% in 2020 and 7.9% in 2021.