Photo: Latin American Economy, Though Growing, Has Not Escaped Effects of Global Recession
As the U.S. stock market shoots up and crashes down hundreds of points in a matter of just hours, Latin America can do little to avoid the effects of the global recession.
Though Latin America saw a 6.2 percent growth in its economy in the last 10 years, Morgan Stanley’s recent report states it could see a “significant slowdown” if Europe and America head in to another recession, as the misconception that economies like Brazil have made it through the global recession unscathed is just that, a misconception.
Bloomberg’s analysis of the report stated:
In Brazil, the region’s biggest economy, gross domestic product shrank 15.7 percent on an annualized basis in the fourth quarter of 2008. While the size of the initial decline in Mexico was less severe, the recession in Latin America’s second-largest economy was more prolonged, with GDP contracting 6.1 percent in 2009 compared with 0.2 percent for Brazil, the report said.
Despite the negative effects however, both Mexico and Brazil’s finance ministers believe their countries’ economies will continue to grow. And it would appear U.S. companies agree as they have taken notice of the Brazil’s growth in consumer demand and the ever-expanding middle class which is the driving force behind any successful economy.