The financial crisis: origin and outlook

The international financial crisis, initially considered limited to the US mortgage market, has had a strong impact on the real economy of the main OECD countries and, consequently, on the rest of the world through the adjustment in global aggregate demand. This crisis, the most severe since the 1930s, is also impacting developing countries, although its full extent is uncertain. A recession is forecast for 2009 in the developed world and a slowdown in emerging economies. Latin America, which had experienced strong growth in recent years, now faces a decline in commodity prices, which will affect its exports, investments, financing and remittances. The crisis that began this year could be prolonged unless OECD countries intensify their countercyclical policies and their willingness to cooperate with developing countries.