Economic Survey of Latin America and the Caribbean 1988

image of Economic Survey of Latin America and the Caribbean 1988

In 1988, the economic crisis of Latin America and the Caribbean took a dramatic turn. For the first time since the 1981-1983 recession, the per capita product declined to a level equivalent to that of 1978; inflation almost quadrupled to an unprecedented average of 760%, and real incomes declined in most of the countries.



The transfer of resources and inflation

The reversal of the direction of resource transfers and the strong impact this had on both internal and external adjustment processes were the main —although certainly not the only— reasons for the unfavourable economic trends seen in Latin America during the period 1982-1988. With the outbreak of the crisis, the region ceased to be a net importer of resources as befits a region of developing countries, and instead became a net exporter. Moreover, the magnitude of this turnaround was striking: whereas the inflow of resources to the region prior to the crisis had amounted to around 2% of its gross product, between 1982 and 1988 the outflow of resources from the region was equivalent to about 4% of the product.


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