World Bank urges Caribbean countries to contain costs while awaiting COVID vaccine

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(CMC) A new report by the World Bank says Latin America and the Caribbean (LAC) will require a combination of public health measures and economic management to deal with the impact of the coronavirus (COVID-19).

It says the LAC is the region hardest hit by the virus, casting a spotlight on the need to protect the population while putting economies back on track.

The Washington-based financial institution says the economies of the region are suffering from lower foreign demand, increased economic uncertainty, a collapse of tourism and the consequences of months under lockdown to try to contain the spread of the disease.

The report titled “The Cost of Staying Healthy”, also notes that with the pandemic expected to continue for an extended period, health care systems should consider reforms to improve effectiveness and reduce the costs borne by governments and individuals.

In addition, governments will need to find paths back to fiscal consolidation after this necessary period of high spending on economic stimulus and emergency social transfers, according to the report.

“Our region is suffering the worst economic and health impacts of COVID-19 of anywhere in the world, which calls for clarity on how to combat the pandemic and put the economies back on track for a swift recovery,” said Carlos Felipe Jaramillo, World Bank Vice President for the Latin America and the Caribbean region, adding “we need to rethink the future to build back better”.

The World Bank noted that because of the pandemic, gross domestic product (GDP) in the Latin America and Caribbean region (excluding Venezuela) is expected to decline 7.9 per cent in 2020, but that a return to growth of four per cent is expected in 2021.