In the Preliminary Balance of the Economies of Latin America and the Caribbean , an annual document of the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC), it is estimated that Panama will grow by 5.5% in 2021, after supporting a drop of -11% in 2020, a figure that in the case of Latin America and the Caribbean shows a contraction of 7.7% for this same year.
Overall, the agency forecasts “that the region would experience a growth rebound of 3.7% on average. South America would grow by 3.7%, Central America and Mexico, 3.8%, and the Caribbean, 4.2% according to the attached graph.
The Cepal analyzes that this rate of the 3.7% of growth forecast for 2021 “is greater than the rates at which the region has been growing in recent years (0.3% on average in the six years from 2014 to 2019)”, however, it is for the great majority of reasons “of a statistical carry-over or rebound effect and it will not be enough to recover the GDP levels lost in 2020”.
The document warns that Latin America and the Caribbean is “the region most affected in the developing world by the crisis derived from covid-19.”
From this perspective, the agency points out that “the role of active macroeconomic policies is crucial so that, after the rebound that could occur in 2021, the region manages to boost its growth beyond its performance in recent years .
Without these active measures, the return to pre-crisis levels of economic activity is expected to take several years ”.
The report recognizes that “ activity closures and movement restrictions resulting from the pandemic have caused the destruction of productive capacity , with high social costs, such as increased unemployment, poverty and inequality, which aggravates the long-standing disparities in the region ”.
Alicia Bárcena, executive secretary of ECLAC, quoted by the agency, recognizes that the dynamics of 2021 will be marked by high uncertainty, in particular linked to the risk of a re-outbreak of coronavirus cases.
Similarly, there is a challenge associated with “agility to produce and distribute vaccines and the ability to maintain fiscal and monetary stimuli to support aggregate demand and the productive sectors.”
Bárcena reflects that sustainable and inclusive growth goes hand in hand with a productive transformation “towards environmentally sustainable sectors, which favor the generation of employment and technological innovation.”
The ECLAC report offers a broad overview, from the world economy to liquidity, external sector, employment and wages, as well as the economic prospects and risks that Latin America and the Caribbean will face in 2021, with statistical annexes showing the evolution and future of nations in a time of marked contradictions and uncertainties due to the pandemic.