Economic Survey of Latin America and the Caribbean 1987

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In 1987 the acute economic crisis in which Latin America and the Caribbean have been plunged since the beginning of the decade worsened. At the same time as the rate of economic growth fell, inflation sped up markedly, and the results achieved by the external sector, albeit more satisfactory, were limited to a very small number of countries.




In 1987 there was a worsening of the economic crisis affecting Nicaragua since 1984, as manifested primarily in an outbreak of real and financial deficits, both external and domestic. This especially difficult situation was due to numerous factors which had a feedback effect on each other, making it difficult to establish their order of importance. Some of these factors, which were extra-economic in nature —such as the armed conflict, with its tragic consequences in terms of human and material loss— have existed for many years now, and their adverse effects have forced the government to alter its objectives and have played havoc with the implementation of economic policy. More recently, this situation was aggravated by the trade embargo imposed by the United States, which badly hampered the country's foreign trade. All these factors forced the government to reallocate scarce resources (material, human and financial), which led to a rise in prices and left the economic system in disarray.


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