As a result of the novel coronavirus, the Inter-American Development Bank (IDB) has predicted that Latin America and the Caribbean will see sharp growth reductions that range between -1.8 percent and -5.5 percent of Gross Domestic Product (GDP) in 2020.
This was outlined in one of its latest reports which analyze growth scenarios amid the coronavirus pandemic, while providing some useful economic policies that countries can adopt so as to recover from the economic damage will likely carry into 2021 and 2022.
Speaking on the state of affairs that has confronted Latin America, the Caribbean and the world over, Chief Economist for the IDB, Eric Parrado said one can expect economic shocks of historic proportions. At this point, the IDB official said that countries should be making every effort to save lives by ensuring social distancing and providing their health sectors with adequate resources. The Chief Economist also said that complementary and temporary economic interventions can support economies during the partial, organized shut-downs.
Further to this, Parrado said, “We need to preserve the core of our economies to improve the chances of a quick rebound. Providing relief to those more vulnerable households that have lost their sources of income, helping and giving incentives to firms to reduce liquidations and avoid separation from their employees, and extending liquidity to banks so they be part of the solution, can all work in that direction.”
Additionally, the official said that the next weeks will not be easy as policymakers will be placed under great stress with many difficult decisions to make. As always, Parrado said that the Inter-American Development Bank stands ready to provide both financial and technical support to the best of its abilities.
