Latin America will not recover pre-pandemic GDP per capita levels until 2023 or 2024, according to a report

Latin America and the Caribbean will not recover the levels of GDP per capita prior to the Covid-19 crisis until 2023 and 2024, according to a study prepared jointly by the development bank of Latin America (CAF), the Development Center of the OECD, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and the European Commission.

The document, presented on Tuesday in Madrid, maintains that the Latin American region was the area most affected in the world by the coronavirus crisis. The Gross Domestic Product (GDP) fell by 7% in 2020, poverty and extreme poverty reached rates not seen for 12 and 20 years, respectively, and inequality increased.

In this context, the study proposes the development of different political, economic and social strategies to promote the progress of the region through a recovery "strong, sustainable and inclusive"after the situation caused by the pandemic.

The head for Latin America and the Caribbean of the OECD Development Center, Sebastián Nieto Parra, stressed the need to promote sustainable and adaptable macroeconomic frameworks to consolidate the recovery of the region, and renew international cooperation to support these efforts.

For her part, CAF’s Director of Macroeconomic Studies, Adriana Arreaza, highlighted the precariousness of social protection systems "which is one of the great existing debts", and the increase in debt levels due to Covid. However, he added that since 2020 and 2021, liquidity in the markets has allowed some recovery. Lastly, Arreaza highlighted the importance of tax reforms in order to respond to citizens’ service demands.

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