Interview, Fireside Chat
Latin America’s Response to the Economic Downturn
- Regional economic contraction is projected at 3.8% by Goldman Sachs and 5.2% by the IMF, figures that would represent the largest decline in activity since the end of World War II if they hold.
- Governments are expected to implement large-scale bailbacks and stimulus programs similar to those in the US and Europe, though execution capacity is constrained by limited fiscal resources.
- Latin American economies are preparing for persistent dollar-denominated debt obligations post-crisis, with additional borrowing for stimulus increasing future repayment burdens.
- Goldman Sachs anticipates a potential economic recovery starting in the latter half of the current year and is actively facilitating debt issuance and managing volatility in foreign exchange and commodities.
- Local markets have become materially larger and more sophisticated, while central banks have largely acted independently in coordination with multilateral agencies to establish special funding initiatives.
- The duration of the current situation remains uncertain, and cited economic decline figures are currently indicative and subject to revision.