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3 The effects of the global financial crisis in Latin American countries’ economic performance
3.1 Argentina
Argentina was having a steady growth in appears that from 2006 the second semester Argentina was having a double digit GDP Growth. After the collapse of Lehman and Brothers; the GPD went negative for two periods in a row having decreasing -9.09% in the last quarter of the year and decreasing -14.55% in the first quarter of 2009 Table 2. Their exports moved in a similar way, in this case in the past two years, Argentina was having excellent forth quarters looking a steady growth. But in the forth quarter after the collapse, the exports decreased -32.78% and in the first quarter of March 2009 it decreased by -30.74% Table 1. The argentine peso was stable before the crisis, which was a challenge from the government after the crisis they had. But in after in September 2008 their currency had almost a 8% depreciation in a month and continued depreciating during the next periods Graph 11.
3.2 Brazil
Brazil was having one of the most amazing economic growths in the region. From the first quarter of 2006 to the third quarter of 2008; Brazil almost had a 50% growth in their GPD Graph 1. Not soon after the collapse of Lehman’s the GDP decreased -36.28%
in the forth quarter of 2008 and in decreased -10.03% by the first semester of 2009. Their exports moved in a similar way, but the unique difference with the GDP, is that the export were having a good third quarter and the GDP was having a better forth quarter.
And later the third quarter of 2008 decreased 24.87% and in the first quarter decreased -46.65% Table 4.
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Graph 1.
Source: Latin Macro Watch (LMW), Inter-American Development Bank
The Brazilian government has had several problems trying to control the inflation during the last years. The Brazilian Real appreciated almost 40% in the last two years previous the crisis, but soon after in just took less than three months to depreciate to a lower price in comparison of the price from two years ago; in one month the currency depreciated -16% Graph 15. However the inflation rate changed in the opposite direction.
3.3 Chile
Chile was not having an amazing growth, although it was steady and stable. From the first quarter of 2006 to the second quarter of 2008 they had almost a 32% of growth.
The main difference of Chile is that the decrease in their GDP started in the third quarter of 2008, in the same semester that Lehman’s bankruptcy. The GDP decreased by -17.05% in the third quarter, -24.19% in the forth quarter of 2008 and in the first quarter of 2009 it did not move too much, just 1% Table 6. More important the exports started to decreased one quarter even before the collapse of Lehman it decreased by -4.53% in the second quarter, by 10.87% in the third quarter, by -29.16% in the forth quarter of 2008
0.00 100,000.00 200,000.00 300,000.00 400,000.00 500,000.00 600,000.00 700,000.00
2006-Mar 2006-Jun 2006-Sep 2006-Dec 2007-Mar 2007-Jun 2007-Sep 2007-Dec 2008-Mar 2008-Jun 2008-Sep 2008-Dec 2009-Mar 2009-Jun 2009-Sep 2009-Dec 2010-Mar 2010-Jun 2010-Sep 2010-Dec 2011-Mar 2011-Jun 2011-Sep
Brazil GDP millions of USD $ - Quartly
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decrease in their export Table 5. The Chilean peso was appreciating in a small slowly but during the beginning of 2008 appreciated in a faster pace, until after collapse suddenly depreciated by almost 15% in one month Graph 20.3.4 Colombia
Colombia was having a quarter-by-quarter growth; most of the countries were having a steady growth but having a small decrease at the forth or first quarter; however Colombia every quarter was growing until the collapse of Lehman. The Colombian economy experienced a rapid decline of the Gross Domestic Product. It declined slowly in the third quarter of 2008 by -4.05%, then in decreased substantially with -21.40% and finally in the first quarter of 2009 it decreased by -4.81% Table 8. The exports suffered a decrease of -3.36% in the year Table 7. The Colombian Peso had a big appreciation during the past two years, but it only took several months to get in the same level as two years ago; it depreciated by 10% in only one month Graph 25. The inflation also fell during the crisis Graph 29.
3.5 Mexico
Mexico was having an acceptable GDP growth; after the collapse of Lehman, their GDP decreased by -27.85% in the forth quarter of 2008 and by -19.48% in the first quarter of 2009, one of the deeper declines in comparison with others economies Table 10. The exports were gaining a big momentum until the collapse of Lehman, in the same quarter as the Lehman went to bankruptcy; Mexico had a slight decrease in their export with -1.77% but it was until the third quarter of 2008 where they had a -22.41% of decrease and in the first quarter of 2009 they had a -24.84% decline Table 9. Mexican Peso has been know for its volatility, but before the crisis started it maintained pretty stable, it reached its best price before the collapse and the it depreciated almost 35%
during the next 3 months, the currency devaluated 15% in only one month Graph 33.
3.6 Peru
Peru was having a gradual growth of their Gross Domestic Product, and after the collapse of Lehman, the GDP also decreased gradually. In the third quarter of 2008 it
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decreased -7.50%, in the forth quarter of 2008 it decreased -7.6% and in the first quarter of 2009 it decreased by -6.95% Table 12. However the export did not fluctuated in the same way; it was until the third quarter of 2008 that the exports suffered a cutting decrease of -34.06% and in the first quarter of 2009 a decrease of -14.55% Table 11. The Peruvian Nuevo Sol did not fluctuate; it only depreciated 4% as a consequence of the crisis Graph 40. Instead the inflation reached rooftop of 6.50% during the first quarter of 2009 Table 42.
3.7 Venezuela RB
Venezuela is a particular case in Latin America, not only in Latin America but also in the world. Venezuela did not decline its yearly GDP, in 2009 they had a moderate growth of 4.60% Table 14. However in their yearly exports it decreased -63.40% in 2009.
Their currency did not depreciate soon after, it was until January 2009 when the government decided to apply 1:2 currency devaluation, and this means 50% depreciation in one day Graph 5.
Graph 2.
Source: Open Data, World Bank
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Venezuel RB Exports: millions of USD $ Yearly
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