(Fighting New Crown Pneumonia) Global War Epidemic: Three "Black Swans" Flying Together How Latin American Economy Strides Over This "Han"
China News Agency, Beijing, March 15th: Global War Epidemic: Three "Black Swans" Flying Together in Latin America
Author Zhang Shuo
With more and more confirmed cases of new coronary pneumonia in Latin American countries, the epidemic situation in this region is becoming increasingly serious. The outside world is worried that the originally weak Latin American economy will "complicate matters" and face long-term risks. While escalating epidemic prevention measures, Latin American countries have also opened the curtain of "rescue the market."
"Butterfly wings" have been fanned
Under the epidemic, the pressure on Latin American economies can be seen from the performance of major capital markets in the region on March 12.
As the largest economy in Latin America, Brazil's stock market triggered the fuse mechanism twice in a row after the market opened on the 12th. The Brazilian Ministry of Economy released a report saying that due to concerns about the impact of the outbreak on the global economy and the Brazilian economy, the country's 2020 economic growth forecast has been reduced from 2.4% to 2.1%.
On March 14, local time, in Sao Paulo, Brazil, several people wearing masks bought vegetables at a farmer's market. With the spread of the new crown pneumonia epidemic, more and more people wear masks in São Paulo. Local people believe that wearing a mask is the simplest and most effective means of protection in the face of the new crown virus. Photo by China News Agency reporter Mo Chengxiong
In another South American country, Argentina, the stock market and bond market both fluctuated sharply on the 12th, causing the national risk index to continue to rise, setting a record since 2005. This also means that Argentina needs to pay more for international financing.
Chile's economic operation is also not optimistic. The IPSA index of the Santiago stock market fell by 6.33% on the 12th, the largest single-day drop in 9 years. Chilean economist and former central banker Bergara believes that Chile's economic growth this year may be zero, and even some quarters will experience negative growth.
Mexico, which is adjacent to the United States, was also not immune, and its stock market fell 5.28% on the 12th. The Mexican Foreign Exchange Commission issued a statement saying that the relevant departments will continue to track the financial market conditions and take additional measures to respond if necessary.
"Affected by the spread of the epidemic, the drop in oil prices, and the meltdown of US stocks, the three black swan flying in Latin America are not good news for the local financial market." Yue Yunxia, director of the Economic Research Office of the Latin American Institute of the Chinese Academy of Social Sciences in In an exclusive interview with reporters, he said that the outbreak has a great impact on regional economic impacts, and global policy adjustments have also responded in Latin American countries.
Yue Yunxia further pointed out that before the outbreak, the International Monetary Fund (IMF) had already lowered Latin America's economic growth forecast for 2020 to 1.6%. "Although several major economies, including Brazil, Mexico, and Argentina, have shown signs of improvement this year, with the outbreak of the epidemic, local production activities have gradually declined, and market risk appetite is changing, which may lead to asset transfers. For Latin American economies whose economies are inherently fragile, 'wings of butterflies' have been fanned. "
"The outbreak has indeed caused a great impact on local production and life." Wang Xiaojun, president of the Brazilian Chinese Chamber of Commerce, said that the impact of the epidemic on Brazil's financial, agricultural, mining, and energy industries is becoming prominent.
Wang Xiaojun, who has lived in Brazil for 19 years, said in an interview with reporters: "The Brazilian economy accounts for the largest proportion of agriculture, mining and services. Due to the global epidemic, Brazil's agricultural and mineral export orders in the first quarter decreased. "
Both "rescue the market" and "remove the root cause"
In the face of multiple pressures, Latin American countries have also opened the curtain of "rescue the city" while continuously upgrading their epidemic prevention measures.
To stabilize financial markets, Mexico announced the launch of a US $ 2 billion rescue plan; Chile's central bank announced measures to improve market liquidity through measures such as reverse repurchases; Argentina's central bank sold US $ 100 million to stabilize the exchange rate; more countries are calling on the market to remain rational and calm At the same time, it has begun to actively implement policies.
However, most analysts believe that the current situation in Latin American countries is also constrained by multiple factors such as politics, economy, and society. It is necessary to "rescue the market" in the short term and "cure the roots" in the long term.
The American Quarterly Journal noted the relatively fragile health systems in Latin America. The article states that Latin America spends $ 949 per person per year on health care, which is much lower than the Organization's Economic Cooperation and Development Organization (OECD) 's $ 3973 per person. In addition, many Latin American countries are also subject to external economic sanctions. For example, Venezuela and Cuba, which have suffered long-term economic blockades in the United States, may have made their economic situation even worse. After Venezuelan ’s first confirmed two cases of new pneumonia on the 13th, the country ’s attorney general, Saab, issued a speech demanding that the United States immediately lift sanctions.
Experts suggest that a multi-pronged approach should be taken to improve the Latin American economy. Yue Yunxia believes that "the only way out is to carry out a thorough structural reform." (Finish)