Special Feature: Fiscal policy responses to the COVID-19 crisis in Latin America

The COVID-19 pandemic has triggered the worst economic crisis in Latin America and the Caribbean for 120 years, causing significant short- and medium-term reductions in growth and increases in inequality, poverty and unemployment (ECLAC, 2021[1]). Necessary public health measures to protect human life precipitated a decline in GDP through two channels: on the supply side, the sudden interruption of supply chains associated with the closure of a large part of the companies that carry out activities identified as non-essential. On the demand side, layoffs or partial unemployment strongly impacted household income, thereby reducing consumption.