International trade in Latina America and the Caribbean 2009: crisis and recovery

The financial crisis that began in the United States in mid-2007 - and spread very quickly to the real sector of the global economy beginning in September 2008 - had a strong impact on growth in Latin America and the Caribbean in 2009. The Economic Commission for Latin America and the Caribbean (ECLAC) has estimated that in 2009 the gross domestic product (GDP) fell by 1.9%, ending the cycle of high growth which characterized the period 2003-2008. One of the main channels of transmission of the crisis to the region was international trade. Both regional exports and imports dropped in a dramatic and widespread way during the last quarter of 2008 and the first of 2009, hit by declining demand in most of the world and by the restrictions in trade finance. Thus, the first half of 2009 ended with a decline in the value of exports and imports from the region of 30% and 29%, respectively, as compared to the same period in 2008. This level of decline in export value had not been seen since the thirties, while that of imports was similar to that observed during the external debt crisis of 1982. In the second quarter of 2009, and more strongly in the second half of the year, the global economy began to show a modest recovery of which both the fiscal and monetary stimulus applied in industrialized countries and the continued economic dynamism of China were main determinants. While the recovery is still in its infancy and is characterized by several elements of uncertainty, the worst of the crisis seems to be behind us. The figures of foreign trade in Latin America and the Caribbean reflect the signs of recovery seen elsewhere in the world. The year 2009 ended with declines in the value of exports and imports from the region in the order of 23% and 25% respectively, as compared to 2008. This is indeed a significant reduction, but lower than the one observed at the end of the first half of the year, allowing a glimpse of better prospects for 2010. This publication presents recent foreign trade developments in the region, broken down by origins and destinations and product groups, and in terms of both value and volume. Therefore, it updates the analysis contained in the document: Latin America and the Caribbean in the World Economy 2008-2009", published in August 2009 by ECLAC."