Economy

Coronavirus could strongly impact the economy of Chile and Peru in Latin America

Other countries such as Brazil, Colombia, and Argentina could suffer economic impacts too

Coronavirus could strongly impact the economy of Chile and Peru in Latin America
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Even that coronavirus hasn’t become a health crisis in Latin America, the whole world is dealing with the consequences of the current situation in Asian countries and in each region is being affected in different proportions. 

According to a report created by The Economist and first released by El Mercurio, Chile and Peru could be the most affected in Latin America with a risk of suffering a meaningful slowdown in the economic rates. Asia is the region that most buys Chilean and Peruvian commodities, mainly copper and oil, that’s why the coronavirus could drive into a reduction in exportation rates and have a direct impact on the economy. In Peru, trade means 50% of the country’s GDP and in Chile, it represents 60%. 

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However, it doesn’t mean that these two countries will be the only ones to suffer the impacts. Considering the last forecasts, China‘s GDP might decrease from 5.9% to 5.4% in 2020 because of the coronavirus impacts, “we expect the coronavirus to reduce China’s consumption, private investment and the growth of exports and imports, which will have a direct impact on Latin American economies,” pointed out the report. 

Brazil, Argentina, and Colombia are also expecting to be affected by China’s slowdown but in a lower proportion, regarding that trade represents around 30% of the Brazilian and Argentinean GDPs. 

The report also adds that the impact should be temporary and by the second semester of 2020 the commercial relation between China and Latin America probably gets back to the normal rates.