Latin America’s economies have an opportunity to grow

RUA 25 DE MARçO in São Paulo is the biggest shopping area in Latin America. Before the pandemic, an average of 400,000 people a day went there looking for makeup, electronics, household items and more. Most of the goods were imported from Asia. Despite an easing of pandemic restrictions and increasing vaccination rates, the crowds have not returned. Around a fifth of shops have closed permanently. Edmilson Lucas, who runs a shop there, says it is hard to obtain supplies, with the value of the Brazilian real down by a fifth since the start of the pandemic, to $0.18. It is even harder to sell his goods, considering that 14% of the population is unemployed. “I don’t know how much longer I can keep the doors open,” he says.

Laments like these can be heard across Latin America. No region has suffered more as a result of the pandemic. More than 2.1m people in Latin America and the Caribbean have died of covid-19; the death rate in the region is easily the highest in the world, according to The Economist’s excess-mortality tracker. The economic toll has also been crushing. Output dropped by 7% in 2020, the steepest decline of any region. And although a surge in commodity prices early in 2021 is likely to have boosted growth this year to a respectable rate of more than 6%, GDP will remain below its pre-pandemic level at the end of 2021. The IMF forecasts that growth in 2022 will be lower in Latin America than in any other part of the world.