CARACAS – Venezuela’s economic activity is forecast to drop 25% in 2020 due mainly to the COVID-19 pandemic, said the International Monetary Fund (IMF) on Tuesday without further elaboration.
Yet, Venezuela is not alone in taking the hardest hit as it is followed by Peru with 13.9% in the aftermath of the outbreak, the organization said.
It is worth noting that the IMF improved its outlook for Latin America and the Caribbean by forecasting a drop of 8.1% in the region, down 1.3 points from its previous forecast in June.
However, the region will be the most heavily impacted by the economic effects of the sanitary crisis, since many countries will be “severely affected when facing deep recessions,” the Fund said in its Global Economic Outlook report.
Brazil and Mexico, the region’s largest economies, will see a drop of 5.8% and 9%, respectively, this year but are forecast to grow back again by 2.8% and 3.5% in 2021. Argentina, looking to renegotiate a $44 billion loan with the IMF after the devaluation of the peso currency, will also experience a decline (11.8%) in 2020 and a rebound next year (4.9%).
Paraguay and Uruguay, which are the least affected countries by the pandemic, will see contractions of 4% and 4.5%, respectively.
Lastly, the Dominican Republic and Central American countries were forecast a recession of 5.9% this year followed by a rebound of 3.6% in 2021.
The IMF is holding its annual (virtual) meeting jointly with the World Bank this week, discussing the main economic challenges still ahead to exit the crisis caused by the COVID-19 pandemic.