(Bloomberg) -- Gross domestic product in the Latin America and Caribbean region, excluding Venezuela, is expected to shrink 4.6% in 2020, according to the World Bank.

The dramatic drop in demand from China and G7 countries due to the Covid-19 pandemic is affecting commodity exporters in South America and exporters of manufactured goods and services in Central America and the Caribbean. A collapse in tourism is also severely impacting some countries in the Caribbean.

The sharp economic drop asks for “several policy responses to support the most vulnerable, avert a financial crisis, and protect jobs,” the World Bank said in a report called “The Economy in the Time of the Covid-19,” published Sunday. If governments manage to preserve jobs, the region should resume growth quickly and the GDP should expand 2.6% in 2021.

To help the most vulnerable, the region’s governments should scale up existing social protection and assistance programs and extend their coverage, taking on the burden of much of the losses. While those measures could come at the cost of fiscal austerity, governments need to step in to protect the big chunk of the population who have informal jobs and also, if needed, inject liquidity into financial institutions and strategic employers in exchange for ownership stakes, according to the document.

The World Bank is offering as much as $160 billion in financial support for countries to counter the sweeping virus-fed crisis over the next 15 months.

©2020 Bloomberg L.P.