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Outlook for Latin America and the Caribbean: An Intensifying Pandemic

By Alejandro Werner Español Latin America and the Caribbean have become the new COVID-19 global epicenter. The human cost has been tragic, with over 100,000 lives lost. The economic toll has also been steep. The World Economic Outlook Update now estimates the region to shrink by 9.4 percent in 2020, four percentage points worse than the April projection and the worst recession on record. A mild recovery to +3.7 percent is projected in 2021. Latin American countries should be cautious in...

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Economic Policy in Latin America and the Caribbean in the Time of COVID-19

By Alejandro Werner  Español, Português As of today, about 3,000 people have died from the COVID-19 virus in Latin America and the Caribbean. While the pandemic continues to spread across the region, countries are facing the worst economic recession since countries started producing national accounts statistics in the 1950s. The challenging external environment, coupled with much-needed measures to contain the pandemic, have led to a plummeting of economic activity across Latin America—where...

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Outlook for Latin America and the Caribbean: New Challenges to Growth

By Alejandro Werner Economic activity in Latin America and the Caribbean stagnated in 2019, continuing with the weak growth momentum of the previous five years and adding more urgency and new challenges to reignite growth. Indeed, real GDP per capita in the region has declined by 0.6 percent per year on average during 2014–2019—a sharp contrast from the commodity boom’s average increase of two percent per year during 2000–2013. This weak momentum reflects structural and cyclical factors....

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Tentative Stabilization, Sluggish Recovery?

By Gita Gopinath عربي, 中文, Español, Français, 日本語, Русский In the October World Economic Outlook, we described the global economy as in a synchronized slowdown, with escalating downside risks that could further derail growth. Since then, some risks have partially receded with the announcement of a US-China Phase I trade deal and lower likelihood of a no-deal Brexit. Monetary policy has continued to support growth and buoyant financial conditions. With these developments, there are now...

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2019 in Review: The Global Economy Explained in 5 Charts

By Gita Gopinath, Gian Maria Milesi-Ferretti, and Malhar Nabar عربي, Español, 中文, Français Global growth this year recorded its weakest pace since the global financial crisis a decade ago, reflecting common influences across countries and country-specific factors. Rising trade barriers and associated uncertainty weighed on business sentiment and activity globally. In some cases (advanced economies and China), these developments magnified cyclical and structural slowdowns already under way....

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Chart of the WeekThe Threat of Inequality of Opportunity

By Shekhar Aiyar and Christian Ebeke There are clashing views on the relationship between income inequality and growth. Some have pointed to at least some measure of inequality as a necessary outcome of the rewards to innovation and risk-taking. Others have argued that excessive income inequality depresses investment in both human and physical capital, two key sources of long-term growth. In recent research we argue that the crucial missing link in the inequality-growth relationship is...

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A Map of Inequality in Countries

By William Gbohoui, Raphael Lam, and Victor Lledo Social and economic inequality between and within regions in countries is rising in many advanced economies and is now at the forefront of the policy debate because of perceptions that some people and places have been left behind. Changes in global trade and technology have shifted jobs and industries on the map, but the economic gains within countries are not well shared. One might think the solution is for people to move in search of...

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The Economic Cost of Devaluing “Women’s Work”

Kristalina Georgieva, Cristian Alonso, Era Dabla, and Kalpana Kochhar As much as half of the world’s work is unpaid.  And most of it is done by women. This imbalance not only robs women of economic opportunities. It is also costly to society in the form of lower productivity and forgone economic growth. It follows that a fairer allocation of unpaid work would not only benefit women, but would also lead to more efficient work forces and stronger economies. For these reasons, reducing gender...

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The World Economy: Synchronized Slowdown, Precarious Outlook

By Gita Gopinath عربي, 中文, Español, Français, 日本語, Português, Русский The global economy is in a synchronized slowdown and we are, once again, downgrading growth for 2019 to 3 percent, its slowest pace since the global financial crisis. Growth continues to be weakened by rising trade barriers and increasing geopolitical tensions. We estimate that the US-China trade tensions will cumulatively reduce the level of global GDP by 0.8 percent by 2020. Growth is also being weighed down by...

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Global Banks May Grow More Vulnerable to a Dollar Disruption

By Claudio Raddatz and Adolfo Barajas عربي, 中文, Español, Français, 日本語, Português, Русский When a Mexican airline buys Brazilian airplanes, it’s likely to finance the purchase with a US dollar loan obtained from a non-US bank. That’s just one example of the dollar’s outsize role in international financial transactions between non-US counterparts. What happens if non-US banks suddenly find themselves short of dollars? That was the case during the global financial crisis of 2007-2008, when...

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