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A senior official with the International Monetary Fund says the world economic outlook may be even worse than the grim forecast announced by the organization last month.
"Our scenario is likely to fall a little short," said Alejandro Werner, the IMF director for the Western Hemisphere, in an interview with Voice of America.
The IMF in April predicted a 3% contraction of the global economy this year, based on projections which assumed the coronavirus health crisis eases in the second half of the year. For Latin America, it had predicted a contraction of 5.2%.
But as more countries open up and the pandemic shows little sign of slowing, Werner said, "We are estimating in a base scenario that it could be double the minus 3 percent, and in Latin America we could see a contraction that is closer to 8%."
Werner said it is "an illusion" for governments to think they can avoid lockdowns and other strict measures, as in Nicaragua, where the government had decided against any type of quarantine and will continue all economic activities.
The IMF official also voiced concerns about Venezuela, which was mired in an economic crisis that forced mass emigration even before the pandemic.
"The case of Venezuela is not a 'lost decade.' It is a decade of a gigantic reversal. What has happened in Venezuela is a macroeconomic and social disaster that we have never seen in the region," Werner said.
If there is a new peak in emigration because of the pandemic, he said, that could worsen the health and economic vulnerability of neighboring countries that receive the Venezuelans.
"But even in the absence of the pandemic, the fact is that 25% of the population has left the country and that represents a major challenge, especially in a context of slower economic growth and less job creation," he added.
The economist stressed that "the conditions have not changed" for the IMF to approve emergency loans to the disputed government of Venezuelan President Nicolás Maduro.
Maduro's government has asked the IMF for $5 billion to help it address the pandemic. The request was rejected on the grounds that Maduro's government lacks international recognition.
To date, the IMF has granted more than $3.4 billion in emergency loans to 19 governments in the Western Hemisphere.