Vaccine Vital to Latin America Economic Recovery

• Widespread vaccination is the key to overcoming the COVID-19 pandemic and bolstering economic recovery in Latin America, says Fitch Ratings in a special report. Some countries have re-imposed mobility restrictions, albeit more localized and less severe than during the initial outbreak, following the second wave of coronavirus cases and deaths in the region.
• The virus resurgence will adversely affect economic activity in Q1 2021, and the scope and pace of the recovery in H2 2021 will depend on the speed and effectiveness of vaccine rollouts. Social distancing measures are likely to be eased but not fully removed until H2 2021 or even 2022.
• Vaccination has begun slowly in much of the region, and limited vaccine supply and weak distribution networks pose challenges. Mexico, Peru, and Chile appear best placed in terms of vaccine agreement coverage as a share of their populations.
• A key risk for economic recovery is the prevalence of new variants that may be more contagious, have higher mortality, or be more resistant to the existing vaccines. Slower-than-expected distribution or production bottlenecks (some evidence of this exists in the EU) would further slow the vaccine rollout and delay the recovery.

(Source: Fitch Ratings)