From the Document: "While Covid-19 will have a serious detrimental impact on the economies of Latin America and the Caribbean, the oil price war is a second economic blow for the region. Relative to the prevailing outlook in late January, Latin America will face a year of lower economic growth and much weaker public finances, leading to potential downgrades in sovereign ratings. But the real problem is that the region has limited capacity to offset the external shocks with monetary and fiscal policies, darkening the outlook further. To create that capacity, governments will need to adopt a strategy that combines short-run stimulus measures while at the same time implementing structural reforms that improve the fiscal outlook in the medium-term. It is worth noting that many countries in the region were already under stress before the Covid-19 pandemic. Chile and Colombia have been hit by social protests over economic inequality and a lack of social mobility; Venezuela is in the midst of the worst humanitarian crisis the region has ever seen. How the pandemic and the oil war interact with social unrest may not be clear, but it appears that unstable initial conditions can amplify their economic ramifications."
Columbia University Center on Global Energy Policy
Columbia University Center on Global Energy Policy: https://energypolicy.columbia.edu/