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Latin America and the Global Economic Crisis

10 pages

An overview of the region up to 30 January 2009 by the UN Economic Commission for Latin America and the Caribbean (cepal) argues that the larger economies have been more directly affected by the global economic crisis (because in general they are more integrated with the global markets, especially finance), but are also better equipped to respond to it. In particular, Cepal sees South America as diverging from Central America and the Caribbean, which seem to be both less resilient in terms of their economies, and more exposed to the slump in the USA. They are being driven back to aid as the last/only resort. Mexico is in a category of its own, the most exposed to the US downturn, but as a large economy and an oil exporter, better placed to withstand the downturn than its Caribbean basin neighbours. Cepal highlights: A marked reduction in both international demand and the terms of trade for the region's goods and services, increasing difficulties in accessing international finance, strong pressure on exchange rates due to capital flight, a deterioration in labour markets, investment, and consumption.

KeywordsFinancial crisis Mexico