(MENAFN – Caribbean News Global)
WASHINGTON, USA – The region continues to be severely affected by the COVID-19 pandemic, and new cases have spiked after slowing in early 2021. Brazil in particular is grappling with outbreaks of variants that have not only infected but re-infected people. Mobility restrictions were tightened in countries including Argentina, Barbados, Brazil, Colombia, Ecuador, Paraguay, Peru, and Uruguay in the first half of the year, hindering economic activity, especially in the services sector. Vaccination is uneven across countries.
External economic conditions have improved since the start of the year. Rising commodity prices have bolstered government revenues and remittance inflows remain robust, supporting consumer spending in Honduras, El Salvador, Jamaica, Guatemala, and Nicaragua. International tourist arrivals are at a small fraction of pre-pandemic levels in much of the Caribbean but have approached half of pre-pandemic levels in the Dominican Republic and Mexico in recent months.
Portfolio inflows have slowed, however. Currencies have depreciated and inflation has risen in many countries, albeit from low levels. Given fiscal strains and an assumption of progress in combating the pandemic, spending and tax relief related to COVID-19 is winding down in most countries. Yet the effects of the pandemic remain severe. Employment has not