Latin America

Regional Outlook Deteriorates Markedly

With most of the world's major economies mired in a profound recession despite unprecedented monetary and fiscal stimuli, the global economy is contracting for the first time in decades. The United States is suffering its deepest recession since the Great Depression. Simultaneously, the Euro Area is in the midst of the worst recession since its inception, and the current outlook suggests that virtually all Euro economies will register full-year contractions this year. Finally, the Japanese economy suffered the sharpest contraction ever in the first quarter, dragged down by a protracted slump in exports. That said, leading indicators for certain major economies show that the pace of contraction has moderated substantially and suggest that the global downturn may be bottoming out, with some large economies already able to put the recession behind them. Moreover, business and consumer confidence for certain major economies have recovered somewhat in recent weeks. Despite the sprouting of these so-called 'green shoots', global economic growth is likely to remain extremely weak for the remainder of the year, before gradually recovering over the course of 2010. Against this backdrop, the outlook for economic growth in Latin America continues to deteriorate rapidly and the region is set to contract for the first time since 1990.