Miércoles, 18 de enero de 2017

| 2008/10/17 00:00

The U.S. Financial Crisis Affects Latin America: The Colombian Context

Oct 17 -- The world economy is facing a strong recession due to the explosion of the financial crisis in the U.S. market, which was not widely anticipated. Global growth is expected to stay close to zero for months, as happened during the 2001 world recession.

The U.S. Financial Crisis Affects Latin America: The Colombian Context

The economies of the United States, Western Europe, and Japan are most likely going to experience economic contractions in the near future. However, it will be much more difficult for less developed countries such as those in Latin America to come through this global economic breakdown.

Latin America’s banking systems may be strong enough to weather the storm because many have not invested significantly in the U.S. market, and their domestic financial markets are not as developed as those of other Western countries. However, restrictions on credit may prove to be the most immediate risk for the region. In addition, the fact that the region’s financial markets are small to begin with suggests a significant reduction in domestic investment can be anticipated for next year.

Read the full analysis here.

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