The Latin American Economic Outlook 2021 (LEO) sets out the key foundations for a strong, sustainable and inclusive recovery from the coronavirus (COVID‑19) pandemic in Latin America and the Caribbean (LAC) and provides tailored policy messages to help stakeholders take action and build forward better. The pandemic hit LAC at a time when the region already faced the deep development traps identified in the Latin American Economic Outlook 2019. It exacerbated existing socio‑economic challenges inherent to the four traps: i) low productivity; ii) inequalities and social vulnerability; iii) institutional weaknesses; and iv) the threat to environmental sustainability. The post COVID‑19 context should be seized as a unique opportunity to adopt a multi‑dimensional strategy for development and to redefine national policies by building consensus among citizens and implementing the pending reforms needed to drive the recovery. Moreover, stronger regional integration and international co‑operation that involves LAC countries on an equal footing, regardless of their development level, should play an important role in the region’s recovery.