Our new Regional Economic Outlook: Western Hemisphere projects a real GDP contraction of 8.1 percent in 2020. Unlike in previous recessions, employment contracted more strongly than GDP in the second quarter of 2020, 20 percent on average for the five largest countries, and up to 40 percent in Peru.
Two structural characteristics of Latin American and the Caribbean economies contributed to the relatively larger economic impact: comparatively more people work in activities that require close physical proximity, and less people have jobs in which teleworking is feasible. Almost 45 percent of jobs are in contact-intensive sectors (like restaurants, retail stores, or public transportation), compared to just over 30 percent for emerging markets. In reverse, only about one in five jobs can be done remotely, half the share of advanced economies and below the emerging world average (26 percent). These two features, in addition to a high degree of informality and poverty, and combined with lower trade and financial turbulence caused by the ailing global economy, contributed to the historic collapse in activity.
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