Growth in 2021 will not offset economic decline in Latin America and the Caribbean

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Growth in 2021 in Latin America and the Caribbean is not expected to offset the decline in economic activity in 2020, with a 7.1% decline in average GDP, or reverse the increase in poverty and inequality, warned on Wednesday. the UN.

Especially since “growth will be subject to strong uncertainties due to the persistence of the pandemic and unequal access to vaccines,” warned Alicia Barcena, executive secretary of the Economic Commission for Latin America and the Caribbean (Cepalc), during the virtual press conference to present its “fiscal panorama” of the region for 2021.

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The health crisis linked to the pandemic has raised poverty to its highest level in 12 years, affecting 33.7% of the population of Latin America and the Caribbean.

“Slow growth is expected in the coming years, which will make it very difficult to access employment and overcome informal jobs, which concern more than 54% of workers in the region”, the health crisis resulting in the closure of businesses and the freezing of tourism. Women are the most affected, their participation in the labor market having suffered a decline of 10 years, notes the report.

Rising debt levels

As a result, Cepalc urged governments to expand “fiscal measures” in 2021 to help mitigate the negative social and economic effects of the pandemic.

In 2020, countries in the region spent an average 4.6% of their GDP on efforts to strengthen public health systems, support families and protect production.

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“The increase in public spending to cope with the crisis and the decline in tax collection have led to a significant increase in budget deficits and debt levels in the region, with the gross public debt of the central government representing on average 56.3% of GDP, ”the report notes. “It is essential to establish a link between emergency and economic reactivation”, he added, citing the need for sustainable investments and high employment density.