Falling Case Levels, Vaccinations Point To Fewer Economic Disruptions In Latin America

• The strain of the COVID-19 pandemic is likely to steadily ease in much of Latin America over the coming months. Most countries in the region experienced a worse outbreak in Q221 than the initial wave in cases in Q220, but case levels across South America have fallen significantly from the surge seen in late-May 2021. 
• At the same time, vaccination programmes have accelerated in the past month as global production continues to increase and US and Chinese vaccine donations to the region rise. Uruguay and Chile have the highest vaccination rates in South America with 73.5% and 72.2% respectively of the total population receiving at least one dose of a COVID-19 vaccine as of July 27. 
• Despite the high case levels and re-imposition of lockdown measures, the economic recovery across South America has continued as external demand for commodities remains strong and economies become more resilient to the impact of public health restrictions. 
• Still, the broadening of South America’s vaccination programmes will leave economic activity less vulnerable to the kind of disruptive public health restrictions seen in Q221, suggesting that the region’s recovery will strengthen in the coming quarters. 
• That being said, the pandemic will continue to pose downside risks to growth as major economies such as Colombia and Peru have struggled to ramp up vaccination campaigns and fast-spreading variants of COVID-19 have emerged.

(Source: Fitch solutions)