Alejandro Werner on Latin America's 2021 Economic Outlook
Alejandro Werner on Latin America's 2021 Economic Outlook
The IMF’s Western Hemisphere director recommended that countries use “targeted and fine-tuned stimulus” to increase support for the most vulnerable populations and industries.
Many countries in Latin America and the Caribbean still have fiscal space for further stimulus to power an economic recovery in the region, according to Alejandro Werner at an event on Latin America's 2021 Economic Outlook. In a discussion with AS/COA President and CEO Susan Segal, the International Monetary Fund’s director of the Western Hemisphere Department detailed his organization’s economic prognostication for the region and recommendations for its recovery from the pandemic.
So far, the region’s recovery is better than expected. Stronger growth in the third and second quarters of 2020 resulted in a predicted GDP contraction of 7.4 percent, which was an improvement on previous estimates. In 2021, the IMF foresees 4.1 percent growth for Latin America.
Werner spoke of the need to fulfill a “new social contract” where citizens expect better social services, such as health and education. To do so amidst a pandemic, Werner recommended maintaining—or even increasing—support for the most vulnerable populations and industries, using what he called “targeted and fine-tuned stimulus.” Many countries have capacity for increased spending, according to the IMF, especially in the current low interest rate environment.
