Still grappling with Covid, difficult recovery ahead

Policymakers in the region have started to ease lockdowns but, with daily coronavirus cases still trending higher, restrictions are being lifted much more slowly than in most other countries. And Chile’s government has doubled down on its lockdown in the face of an extreme outbreak. Recoveries will be much slower than in countries which have already controlled the virus and lifted containment measures more rapidly. Policymakers are facing pressure to provide more support. Indeed, we have seen an expansion of fiscal and monetary stimulus efforts this month, including what appears to be the region’s first QE programme in Chile. And a similar policy in Peru is growing increasingly likely.