1. 2020 is a fateful year. All countries are facing grave circumstances that are affecting the international economy as a consequence of the Covid-19 Pandemic. I will not be the only one to point out that the projections of the fall in global GDP would be -4.5% by 2020.
2. On the other hand, the effects of the pandemic on the Latin American economy are visible. This year GDP points to a fall of 9.1%.
Latin American economies reached the pandemic, with the exception of a few cases, after half a decade of minimal growth. In the first quarter of 2020, GDP was already negative in nine out of twenty Latin American countries as a result of low external demand, with China in the midst of the crisis at the time.
During the first half of the year and part of the second, the pandemic restrictions, with the consequent partial or total paralysis of the production of goods and services, only aggravated that negative figure. In addition, household spending deteriorated as a result of the mandatory confinement imposed by the authorities in many countries, and household inflows fell resulting from the loss of sources of work.
In parallel, Latin America has suffered a significant deterioration in its prospects abroad, both due to falling commodity prices – which remains its main source of foreign exchange – and because of the crisis in its main commercial partners.
According to the United Nations, food and metal exporting economies will be less affected, and the good news is that unlike other major recessions in the past, the economic slump is not yet producing a domino effect on banks. The financial crisis seems, for now, to be ruled out. Inflation is also under control except in a couple of countries that have been dragging their own inflationary dynamics long before Covid-19 began to sound in the media.
3. This second half of 2020, the international economy experienced a slight uptick as a result of the relaxation of strict containment measures and confinement in the peak months of Covid-19 in many countries and the consequent economic revival.
We hope that if there is a resurgence of the pandemic in the coming months, this slight recovery will not be affected in the eventuality of the implementation of new restrictive measures.
At global level the economic growth is expected to reach 5% by 2021. However, all this is still uncertain and depends on the evolution of the pandemic and the availability of a vaccine.
According to a last analysis of the Focus Economics Consensus Forecast LatinFocus, the projected growth of GDP in Latin America will increase, on average, 4.1% in 2021, 2.9% in 2022 and 2.8% in 2023.
4. We must now work on building confidence for recovery.
To do this, countries are adjusting strategies for economic reactivation, flexibility in fiscal and financial support policies, employment, and strengthening the health sectors, among others.
The objectives and priorities set out are to continue efforts to contain the pandemic and mitigate its impacts, to support individuals and businesses to overcome the consequences of the pandemic, restore the economy and return to normal in the region.
5. I thank ALABC for the digital meetings it holds, which prove that it is possible to realise economic connectivity, create a productive and business environment, and take advantage of new opportunities.
I also thank those who have preceded me in the floor for giving impulse to the Australia-Latin American relationship, and for agreeing that it is important to respond to the immediate impact of the pandemic by keeping goods and services markets and investment open, and supporting the central role of trade in the economic recovery.
Thanks, ALABC for working on new initiatives in the context of the economic recovery.
Thanks, Australia, for remind us that is a global and moral responsibility, that the vaccine must be share far and wide, safe, available to all, and affordable to all.
Thank you all of you again, and now I have the honour to give the floor to our esteem Minister of Trade, Tourism, and Investment, Senator the Honourable Simon Birmingham.
Latin America is ready to answer your calls, dear Minister.