62% of International Monetary Fund loans in response to the coronavirus pandemic went to 21 Latin American countries due to how badly the region was affected, said Kristalina Georgieva, managing director of the IMF.
Georgieva commented in a panel organized by the Americas Society / Council of the Americas that the Fund had a lot of ammunition left and that it would focus on helping the countries of the region take a “turn towards a greener, more digital and fairer economy” .
Latin America has 8% of the world’s population, but about 20% of Covid-19 infections and 30% of deaths, and the end of the pandemic is not yet in sight, Georgieva said.
The IMF’s forecast for 2021, Georgieva added, anticipates global growth of 5.2% in 2021, with emerging markets expanding 6%, but only 3.6% in Latin America.
The IMF chief said that countries in the region could achieve better growth in the future by investing in human capital and education, tackling persistent inequalities and creating more opportunities for youth, women and entrepreneurs.
To reduce gender inequality, governments should create conditions to increase women’s participation in the labor force, including by investing in rural roads, enacting anti-discrimination requirements in the private sector and creating more affordable childcare, he said.
Georgieva maintained that the election of the United States and the firm commitment of the incoming administration of Joe Biden to combat climate change, as well as the plan to invest 4,000 million dollars in Central America, are good news for Latin America, which sends about 45 % of its exports to the United States.
Broad plans to boost the US economy and diversify global supply chains would also benefit the region, he said.
On Monday, Honduras released a loan of about $ 90 million to face the impact of the coronavirus and recent hurricanes, the international organization said. The resources are part of a StandBy agreement and a Credit Facility that oblige the Central American country to make reforms to preserve economic stability in exchange for financing. Costa Rica will begin negotiations with the IMF in the second week of January to obtain some 1.75 billion dollars that will allow it to mitigate the economic crisis. The Central American nation seeks to strengthen its public finances and improve its profile in international markets, while the authorities foresee that the budget deficit will exceed 9% of GDP and that the debt will close above 70%.
At the beginning of the month, Colombia made a disbursement of the Flexible Credit Line (LCF) for an amount of approximately $ 5.4 billion. For its part, Panama obtained funds for 1.3 billion dollars from various international organizations to stimulate job creation. The funds came from the IMF, an agency of the World Bank (WB) and the Inter-American Development Bank (IDB).
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