Latin America's Economic Recovery Is Beginning To Show Bright Spots in China-Latin America Cooperation(3)

Long-term challenges remain

Experts believe that it remains to be seen whether the rapid economic recovery momentum in Latin America will continue. It is still threatened by the epidemic in the short term, and faces challenges such as high debt, reduced foreign investment, and single economic structure in the long term.

With the relaxation of epidemic prevention and control in many countries, mutant strains spread rapidly in Latin America, and the number of newly confirmed cases in some countries has surged. As the young and middle-aged groups are the most affected in the new wave of epidemics, the economic development of the region in the future may be dragged down by labor shortages.

The epidemic has further pushed up debt levels in Latin America. Barsena, Executive Secretary of the Economic Commission for Latin America and the Caribbean, said that the public debt of the governments of Latin American countries has increased significantly. Between 2019 and 2020, the debt-to-GDP ratio has increased by about 10 percentage points.

In addition, the Latin American region's attraction to foreign direct investment dropped sharply last year. The Economic Commission for Latin America and the Caribbean predicts that this year's investment growth in the entire region will be much lower than the global level.