The Impact of the CCP Virus on the Macroeconomics of Latin America

  • Author: 徽州小镇
  • Editor: 蚂蚁兄弟
  • Proofreader: 阿伯塔
  • Translator: Jenny Ball

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It is disturbing and uneasy reading the two articles published by Esla, the Latin American research Circle on March 15th ,”Latin America’s Macroeconomy under the CCP Virus Pandemic” and “Latin America is the developing region most severely affected by the CCP virus in the world”.

The population of Latin America only accounts for 8.4% of the global population, but this region has recorded nearly 28% of the world’s deaths from the CCP virus. This serious imbalance in data highlights the huge impact of the CCP virus pandemic on the region.

Since the outbreak, at least 3 million companies in Latin America have closed down due to the impact of the CCP virus, and the number of the poor population has increased by nearly 29 million. The CCP virus pandemic has caused the GDP of Latin America to drop by 8.1%.

The crisis has affected the business in various ways, especially the tourism, culture oriented companies, trade, transportation and other service industries that have been affected considerably. Those are accounting for 24.6% of GDP and 34.2% of employment. Activities such as agriculture, animal husbandry and fishery, food production, medical products and telecommunications have not been affected so severely, but they only account for 14.1% of GDP and 18.2% of employment.

Due to the relatively weaker and lower level of science and technology in Latin America, with the spread of the virus, Latin America is gradually deviating from the core trend of global integration with digitalization, and 92% of technology-intensive production enterprises have been wiped out.

The unemployment rate in Latin America in 2020 is as high as 10.7%, an increase of 2.6 percentage points from 2019. There is a large outflow of labor, and the opportunities for telecommuting are very low. Only 21.3% of the respondents of survey can engage in remote work in the region.

The countries with the highest unemployment rates throughout the year are Argentina (20.9%), Colombia (21.8%), Costa Rica (20.1%), and Peru (39.5%).

Earlier this month, a new research report by the United Nations Economic Commission for Latin America and the Caribbean stated that “Although Latin American countries have adopted protective measures to prevent the further increase of poverty and extreme poverty, the poverty situation in the region has been regressed by 12 years and the extreme poverty has gone backwards for 20 years due to the impact of the virus pandemic.”

The report also stated that “By the end of 2020, the poverty rate in Latin America reached 33.7%, and the extreme poverty rate was 12.5%. This means that by the end of 2020, the total number of poor people has reached 209 million, an increase of 22 million from the previous year. With the virus still on the way, the poverty population in Latin America will continue to expand rapidly.”

The pandemic has affected the revenue and expenditure of the Public Sector. Government tax revenue has dropped sharply, social consumption has shrunk significantly, and public expenditure continued to increase, which resulted in a substantial increase in public debt and government deficits.

In order for the people to cope with the heavy economic burden of the CCP virus, most countries in Latin America have established direct family assistance programs. For example, Chile’s Covid-19 bonds, Brazil’s emergency bonuses, etc. Brazil and Argentina are currently the countries with the highest debt levels in the world.

With the advancement of revealing the truth about the CCP virus, especially the US is to release the official White Book on Virus in near future, I believe that the backyard of the United States, the Latin American countries that have been hit by the CCP’s coronavirus will soon wake up and join the World Justice League to counter fight the CCP. The “debt” must be repaid at all!

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