Latin America is battling one disaster as a mammoth recession looms
(CNN)Even as coronavirus cases soar in Latin America, another calamity looms: Sharply contracting economies, unsustainable debt and deepening inequality could unleash social turmoil in the region.
The regional economy of Latin America and the Caribbean is expected to shrink more than any other region worldwide -- a contraction of nearly 10% this year, according to the International Monetary Fund's June forecast.
The IMF said the "pandemic's still rapid spread indicates that social distancing measures will need to remain in place for a longer time, depressing economic activity in the second half of 2020."
A new UN report goes further -- saying Covid-19 could lead to "the worst economic and social crisis in decades, with highly damaging effects on employment, the fight against poverty and the reduction of inequality."
The region had already been weakened by years of stagnation before Covid-19 arrived. Growth in Latin America and the Caribbean between 2014 and 2019 averaged just 0.4% annually, the lowest since the 1950s. The millions who had finally made it into the middle class faced what the Organization for Economic Cooperation and Development called "a vicious cycle of low-quality jobs, poor social protection and volatile income that leaves them at risk of falling back into poverty." One in five of those aged 14-25 were looking for but failing to find work.
Now, the pandemic is turning anemic growth into a canyon of recession -- and throwing millions back into poverty.