Why Latin America’s economy has been so badly hurt by covid-19

BEFORE THE pandemic hit, Jaime Alirio Pinilla, a 45-year-old in Bogotá, the capital of Colombia, was employed as a construction worker. “But because of this shit I lost my job and now work on the streets,” he says, standing behind a steel cart from which he sells orange juice, sweets, cigarettes and coffee. Colombia has already had one of the longest lockdowns in the world; now it also faces daily clashes between protesters and security forces, as riots over the economic situation continue for a third week. “We've been locked up for more than a year, and we can’t bear this any longer,” says Mr Pinilla. “The economy is ruined, we’re surviving, not living.”

The covid-19 pandemic provoked the deepest global recession since the second world war. But one region has fared worse economically than any other—and by a stretch. Global GDP contracted by 3% last year, but in Latin America and the Caribbean output fell by 7%, the worst of any region tracked by the IMF (although India, almost a region in itself, did worse). In 2020 people in Latin America worked 16% fewer hours, almost twice the loss globally. Several countries in the region have done extraordinarily badly: Peru’s GDP, for instance, fell by 11% last year. And whereas some economies are now roaring back as restrictions are lifted, in Latin America the mood is if anything darkening.