WORLD BANK Sees PLUNGE IN LATIN AMERICA, CARIBBEAN ECONOMIES

MEXICO CITY—THE new coronavirus pandemic could send economies tumbling by 4.6 percent this year across Latin America and the Caribbean, forcing governments to take ownership stakes in struggling major businesses, according to a World Bank report issued on Sunday.

The bank’s Latin America and Caribbean branch projected that gross domestic product for the region will fall by 4.6 percent before rebounding by 2.6 percent next year. Venezuela, which has already seen a dire economic plunge, was not included in the prediction.

That’s even more dramatic than the contraction of 1.8 percent to 4 percent projected earlier this month by the UN’S economic Commission for Latin America and the Caribbean.

The disease has slammed tourism, demand for the region’s products and crucial remittances sent home by migrants in the US and elsewhere.

The bank said governments will need to rapidly ramp up existing social assistance programs while also supporting financial sector institutions and key sources of employment.

“To support jobs and firms, governments may need to take ownership stakes in strategically important firms. To avert a financial crisis, they may need to recapitalize banks and absorb nonperforming assets.”

humberto López, the bank’s acting vice president for the region, said, “We need to help people face these enormous challenges and make sure that financial markets and employers can weather the storm. That means limiting the damage and laying the groundwork for recovery as fast as possible.”

The bank warned that aid for businesses must be seen as“transparent and professional”to maintain confidence and avoid the appearance of corruption.“this may also allow decision makers to take urgently needed measures without fearing prosecution in the future,” it said. AP