Credit: JOAQUIN SARMIENTO / AFP via Getty Images
(CNN Spanish) -
Latin America and the Caribbean are going through their worst economic crisis in a century.
It is estimated that its Gross Domestic Product (GDP) has a regional contraction of 9.1%.
This is indicated by a study that analyzes the effects of the covid-19 pandemic, presented this Tuesday by the Economic Commission for Latin America and the Caribbean (ECLAC).
It is noted that, due to this setback, by the end of 2020 the level of GDP per capita would be the same as in 2010, with a strong increase in inequality and poverty.
On the other hand, 2.7 million formal companies are expected to close in 2020, while unemployment would reach 44 million people.
The latter means an increase of 18 million compared to 2019, the largest increase since the global financial crisis of 2008-2009.
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Furthermore, poverty would reach 231 million people, that is, at the same levels observed in 2005. While extreme poverty would reach the levels of 1990, reaching 96 million people.
The executive secretary of the organization, Alicia Bárcena, pointed out that the effects of this crisis in the medium term will be greater and longer than expected.
"It is going to take several years, years, and the recovery will be slower than that of the subprime crisis," she said.
The report indicates that it will be necessary to maintain expansionary fiscal and monetary policies.
"This entails permanently increasing tax revenues, moving towards more progressive tax systems with greater collection capacity, generating sustainable debt trajectories, and improving the effectiveness and efficiency of spending."
ECLAC
