Latin American GDP Dives as COVID-19 Deepens

By Paola Nagovitch

The pandemic’s economic toll is more clearly emerging. We chart World Bank and OECD figures from April and June.

Before the first confirmed coronavirus case hit Latin American and the Caribbean on February 26, the region's GDP growth was projected to stay below 2.0 percent in 2020.

Then came the pandemic. The World Bank updated its forecast in mid-April, estimating a 4.6 percent contraction for the region. Two months later, things went from bad to worse and Latin America is now the new global epicenter of the pandemic.

The World Bank released its semiannual Global Economic Prospects report on June 8, projecting an economic contraction of 7.2 percent for the region and adding that economic activity will fall “much more steeply than during the global financial crisis or the 1980s Latin American debt crisis.” Though the Bank acknowledged that its forecast is “exceptionally uncertain,” it projects that every country in the region will see their economies shrink this year, with the exception of Guyana (51.1 percent growth), where the oil sector continues to grow.

The Organization for Economic Cooperation and Development, better known as the OECD, painted a similar picture for its regional member countries in its semiannual Economic Outlook report released in June. In mapping both single-hit and double-hit scenarios in which a second wave of the pandemic occurs, the OECD predicts contractions between 5 and 8 percent in Chile, Colombia, and Mexico.

AS/COA Online takes a look at how World Bank projections shifted between April and June, as well as the OECD forecast for the region.