An Economic Storm Is Going to Devastate Latin America Very Soon
Latin America has always been vulnerable to shocks from the global economy. But there’s no precedent for the COVID-19-induced slump that’s about to engulf the continent.
A police officer waits to measure the body temperature of people entering the Central de Abasto on May 8, 2020 in Mexico City, Mexico. The Central de Abasto is the largest market in Mexico and Latin America, boasting financial transaction volumes only surpassed by the Mexican Stock Exchange. (Toya Sarno Jordan / Getty Images)
Latin America’s economic history has long been forged through crises and shocks that stem from the global system. But there is no historical precedent for the turmoil that is just beginning to unfold in the region.
The COVID-19 pandemic has struck at a time when Latin America’s economies were already facing some of the deepest slumps in recent memory. Countries that just a decade ago were riding a growth wave of 5, 6, or 7 percent had seen growth rates fall to 1 percent or less. For several years, Latin America has been the slowest-growing region in the Global South. Now, the coronavirus shock will bring its economies to a tipping point.
Latin America is certainly not unique in this respect: the pandemic has delivered a one-two punch of health crisis and economic disaster almost everywhere it has spread. But the blow will be especially hard for Latin American countries because of their external economic dependence, dilapidated public sectors, and severe social inequalities.
Sorry, but this article is available to active subscribers only. Please log in or become a subscriber.