Latin America and the Caribbean is the emerging market to have suffered the most as a result of the COVID-19 pandemic, according to economists from Atradius.

The trade credit insurer’s latest Regional Economic Outlook identifies structural weaknesses across the region which have made it economically vulnerable to pandemic containment measures, including border controls, travel bans, lockdowns and social distancing. Reduced glob-al demand for goods and services, lower commodity prices and limited access to finance have compounded the situation.

The global collapse in tourism dealt a severe blow to the small island economies of the Caribbean which are among the most dependent in the world on tourism. Until vaccines are more widely available, the tourism sector will remain depressed.

Darren Power, northern regional manager for Atradius UK, commented: “Recovery in the year ahead is set to be stronger in countries that have ample fiscal space to support their economies, such as Chile and Peru while it will continue to lag in tourist-dependent regions. Critically, the future outlook strongly depends on both global and national infection rates and the rollout of a vaccine. The economic benefit from vaccine deployment will most likely manifest first through an improving external environment as Latam’s vaccine orders have been small so far compared to advanced markets. Over the long term, glimmers of hope come from an expected improvement in US relations under a Biden presidency and the development of two free-trade agreements that Chile has secured with Brazil and Ecuador; demonstrating a continued effort by some of the region’s largest markets on delivering sustainable economic benefits despite the challenges brought by the pandemic.”

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