Mexico is the country in Latin America with the lowest package of resources allocated by the Government to lessen the economic impact of the pandemic, according to data from the International Monetary Fund (IMF).
Belize and Mexico are the bottom two economies with the lowest percentage of investment for the pandemic, with amounts less than one percent of their GDP, according to Alejandro Werner, director of the Department of the Western Hemisphere.
In contrast, Peru and Brazil have packages with measures equivalent to 12 and more than 10 percent of their Domestic Product (GDP), respectively; followed by Chile, with an amount of 7 percent of its GDP, and economies that have made a greater effort, such as Bolivia and the Dominican Republic, which have allocated packages equivalent to almost 2 percent of their GDP.
“Although at different rates, until now most countries in the region have adopted important sanitary measures to contain the spread of the virus, such as social distancing practices and the restriction of non-essential activities. They have also increased the amount of fiscal resources allocated to health, which includes detection tests, beds, respirators and other equipment, which is the fundamental priority given that many countries are not yet properly prepared to face the worst stage of the pandemic,” he said.
Given the drastic contraction in the economic forecast for Latin America and the Caribbean this year, “the region has before it the specter of another lost decade from 2015 to 2025,” the official warned.
“With atypical supply and demand shocks, a health crisis and high financing costs throughout Latin America, the necessary measures to mitigate the human and economic costs of the crisis will be enormous and will require an unprecedented strategy,” he wrote.
In its global economic outlook, the IMF estimates that the region will experience a 5.2 percent contraction in GDP this year and that it could recover 3.4 percent in 2021.
For Mexico, the estimated contraction is 6.6 percent in 2020 and a rebound of 3.0 percent in 2021.