Latin America to be poorer after the pandemic, IADB president says
Luis Alberto Moreno, president of Inter-American Development Bank. /Reuters

Luis Alberto Moreno, president of Inter-American Development Bank. /Reuters

Latin America will emerge from the COVID-19 pandemic with higher poverty rates as efforts to control the virus lead to spikes in unemployment and indebtedness, Inter-American Development Bank President Luis Alberto Moreno said in an interview.

Latin America, where economic growth has already been slowing in recent years, is expected to see an economic contraction of eight to 10 percent in 2020 as a result of the coronavirus and associated quarantine measures, Moreno said.

The pandemic "will impoverish not only Latin Americans, (but also) the world in general, but clearly, Latin America is going to be hit much harder because we are an emerging (market) region," he said.

IADB, Latin America's largest regional lender, will approve nearly 20 billion U.S. dollars in loans this year. Around 15 billion U.S. dollars of those will go to governments to strengthen their healthcare systems, he added.

Latin America has become the most impacted region by the pandemic globally, with 26.83 percent of worldwide cases. The region has 4,327,160 total cases of the novel coronavirus compared to 4,308,495 infections in the United States and Canada, the first time it has surpassed the combined infections in North American countries.

Brazil, Mexico, Peru, and Chile are among the top 10 nations in COVID-19 cases, and all these countries have over 300,000 coronavirus cases. Venezuela, with a relatively small caseload (15,988 cases) in the region is suffering the sharpest contraction, according to Moreno, adding the IADB cannot provide any funding to the government of President Nicolas Maduro any more.

Venezuela has been in recession for six years, and annualized inflation exceeds 3,500 percent, according to the opposition-run National Assembly.

(With input from Reuters)