The latest international financial crises began with the collapse of the mortgage market in the United
States in 2007, expanding first to investment markets and subsequently to the real side of the economy.
Turmoil in financial markets led to a marked decline in levels of consumption, investment and growth
expectations. Although the epicenter of the crisis has been in the advanced industrial economies of North
America and Europe, Latin American countries began to feel its adverse effects in 2009. In particular, the
effects of the global financial and economic crisis reached Latin America and the Caribbean through three
main mechanisms: a decline in the price of commodities and its resulting impact on export revenues, the
irregular access to credit markets, and the interruption in foreign capital inflows.
These mechanisms, however, have affected individual countries in the region in different ways and to
varying extents. Mexico, Central American and Caribbean countries have been more severely hit, given
their close economic links with the United States, which not only include trade in goods and services but
also important migration and remittances flows. The economies in Central America and the Caribbean
were also severely hit by the collapse in tourism flows. South American countries, on the other hand,
have been more affected by the decline in commodity prices and export opportunities, which translated
into higher unemployment levels and slower rates of growth. After several years of expansion, 2009 saw
many Latin American countries, including Mexico and Brazil, experiencing negative growth. Yet, in
contrast to previous episodes of international crisis, Latin American countries experienced a quick
rebound from the recent global downturn. Average growth rates, which had fallen to -1.7% in 2009,
reached 5.7% in 2010.