QCOSTARICA – Widespread vaccination is the key to overcoming the COVID-19 pandemic and reinforcing the economic recovery in Latin America, Fitch Ratings said in a special report, published on Monday, February 22.
The rating agency believes that the resurgence of the virus will negatively affect economic activity in the first quarter of 2021, and the extent and pace of the recovery in the second half of 2021 will depend on the speed and effectiveness of vaccine launches.
“It is likely that social distancing measures will be eased but not completely eliminated until the second half of 2021 or even 2022.
“Some countries have re-imposed mobility restrictions, albeit more localized and less severe than during the initial outbreak, following a second wave of coronavirus cases and deaths in the region,” the agency said in a statement.
Fitch Ratings explained that vaccination has started slowly in much of the region, and limited vaccine supplies and weak distribution networks pose challenges.
Mexico, Peru and Chile appear to be better positioned in terms of coverage of vaccine agreements as a percentage of their populations, the agency noted.
Chile, Brazil and Costa Rica, for their part, have administered the highest number of doses per capita to date.
Chile has made notable progress in recent weeks. It now leads the region and plans to vaccinate the majority of its population by end of 2021.
Fitch concluded that 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. That slower than expected production or distribution bottlenecks (there is some evidence for this in the European Union) would further delay the launch of the vaccine and delay recovery.