IMF sees Latin America suffering worst contraction on record

International Monetary Fund on Tuesday forecast ecomy of Latin America and Caribbean will contract 5.2% in 2020 as activity grinds to a halt due to spre of new coronavirus.

A recession of that magnitude would be worst since at least 1980, first year in IMF's World Ecomic Outlook database.

For comparison, global financial crisis caused a regional recession in 2009 that was less than half as deep as one IMF predicts for this year.

IMF report follows estimates by World Bank of a 4.6% contraction for region this year. U.N.’s Ecomic Commission for Latin America and Caribbean projected ecomic activity would fall by 1.8% to 4%.

IMF's forecast includes a 5.3% plunge in Brazil. That would be deepest single-year tumble since 1901, when national accounts data from government's ecomics institute begin. Brazil contracted 2% in 1918, year of Spanish flu pandemic, according to institute.

IMF’s 6.6% contraction forecast for Mexico is worst among major countries in region except Venezuela, which was alrey in throes of a multi-year depression before onset of pandemic. That would be an even poorer result for Mexico than 1995, year of peso crisis that followed sudden currency devaluation.

In its report, IMF concedes re is “extreme uncertainty” around its outlook for global growth, which could be biggest contraction since Great Depression of 1930's, and says exact fallout depends on difficult-to-predict factors including path of pandemic's spre, efficacy of containment efforts, extent of supply disruptions, tightening in global financial conditions and shifts in consumers' behavior.

Ecuor will also be particularly hard hit, with a decline of 6.3%, multilateral lender said in its report.