The Covid-19 pandemic hit Latin American trade flows hard in 2020. The most extreme effects were recorded between April and June and although the region’s external sales began to rally in July, they did not return to prepandemic levels until December.
Although the trade contraction was lower and shorter than initially forecast, this was mainly due to improvements in the prices of some of Latin America’s main export commodities in the second half of 2020. During this period, volumes only recovered partly from the losses of the first few months of 2020.
In the first quarter of 2021, the value of Latin American exports experienced positive year-on-year growth after two years of continuous contraction. This change was driven by prices, while volumes continued to shrink. Volumes did rally significantly in March, although this improvement is partly explained by the comparison to the same month of 2020, when the full impact of the pandemic was first felt.
However, the current recovery is limited by numerous factors of uncertainty against a backdrop of new waves of infection. These are having a severe impact on countries in Latin America, where progress on vaccination campaigns is slow and new containment measures are being implemented. Furthermore, the region is not taking full advantage of the growth in its main two extraregional trading partners, the United States and China.Trade-Trends-Estimates-Latin-America-and-the-Caribbean---2021-Edition-1Q