The coronavirus has continued to spread rapidly across much of the region, with Brazil now registering the most new cases per day of any country in the world. And on a per capita basis, the surge in Peru and Chile look particularly alarming. High frequency data suggest that the damage caused by social distancing is persisting for longer than in many other EMs. Even though governments are starting to lift lockdowns, economic recoveries are likely to come later. This will place greater pressure on governments to increase fiscal support, which would push up debt ratios even further – a particular concern for Brazil.
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