Silvana Tenreyro

Guido Di Tella Memorial Lecture

Economic Challenges to Latin America from the Pandemic

May 2021,

Latin American Centre, University of Oxford

The Pandemic

➢ Health and economic outcomes

➢ Long term scarring: education

➢ Policy space in the recovery: a role for monetary policy

25 May 2021

1. Looking back, the pandemic has hit Latin America particularly hard

25 May 2021

Covid-19 mortality has been high in Latin America

3Source: Our World in Data. Regional breakdown is for South America rather than LA. But Mexico has similar figures to South America.

Latin American economies were hit hard by the pandemic

25 May 2021 4Source: IMF April 2021 WEO.

Latin American fiscal policy has loosened less than in AEs

25 May 2021 5Source: IMF April 2021 WEO.

2. In the near term, Latin America will likely recover more slowly than advanced economies

25 May 2021

Latin America’s vaccine rollout is lagging AEs

25 May 2021 7Source: Our World In Data.

3. In the medium term, Latin America is likely to experience more scarring than advanced economies

25 May 2021

More Scarring expected in Latin America than in AEs

25 May 2021 9Source: IMF, Bank calculations.

More learning scarring expected in Latin America

25 May 2021 10Source: IMF, Bank calculations.

➢School closures for longer

➢Unequal impact, limited online access to education

➢Life-changing impact on skills, nutrition, physical and mental health, etc.

Latin American education already underperformed pre-pandemic

25 May 2021 11Source: World Bank, 2018 PISA scores for reading, math and science.

4. Focus on education to reduce scarring and use monetary policy to help along recovery

25 May 2021