MEXICO CITY, Dec. 20 (Xinhua) — Despite a sharp decline in productivity due to the COVID-19 pandemic, the Latin American economy is to enter 2021 with an outlook for recovery thanks to the vaccine and an improved business climate, experts have said.

The region delivered a better performance in the third quarter of 2020 amid an acceleration of consumption and external demand at the global level, said Alfredo Coutino, head of Latin America Economic Research at Moody’s Analytics, in a recent interview with Xinhua.

External demand would strengthen with the recovery of the economies of countries like China, “which will fuel demand for raw materials and manufacturing, especially the electronics and automotive sector,” he added.

Moody’s Analytics estimates the contraction at 7.2 percent for the region’s Gross Domestic Product in 2020, with a recovery of up to 4.3 percent in 2021.

Separately, Peru’s economy will grow up to 9.2 percent, followed by Chile with 6.4 percent, Argentina with 4.9 percent, and Colombia with 4.8 percent, and the region’s two largest economies, Brazil and Mexico, will see an expansion of 3.8 percent in 2021, Coutino added.

Even with the estimated rebound for 2021, however, it will take Latin America two years to return to pre-pandemic levels, the expert warned.

On Dec. 16, the Economic Commission for Latin America and the Caribbean said the region will not soon return to pre-2019 levels of economic activity, despite an upward trend.

“The outlook is not without risks, and on the global front, a second wave of COVID-19, as is already happening in some countries, is possible,” he said, adding that creating an atmosphere conducive to business as well as allowing reforms and policies in favor of the public well-being will help the region move forward.

Marcos Casarin, chief economist for Latin America at Oxford Economics, told Xinhua that a top favorable business climate is probably to form in Mexico and Colombia, given their low investment risks as well as fiscal discipline shown by the governments despite the pandemic.

“It is going to be an extremely positive year for the global economy and for emerging countries in general, but in Latin America the effect will be different,” Casarin said, adding that mass vaccination campaigns should allow for economic reactivation.

Two factors to the emerging economies’ advantage will be the probabilities that the U.S. dollar is to continue to be weak into next year and that international oil prices are to increase, the expert said.