How Did the Global Financial Crisis Affect the CESEE Region and Latin America? – A Comparative Analysis

This paper examines the impact the global economic and financial crisis had on two distinct emerging market regions, namely Central, Eastern and Southeastern Europe (CESEE) and Latin America. Similar to other emerging economies, both regions were initially surprisingly resilient as the crisis gathered momentum. They were, however, both strongly affected by the sharp retrenchment in capital inflows and the collapse of global demand that followed the demise of Lehman Brothers in September 2008. Notwithstanding differences in the channels of transmission and the intensity of the propagation, the short-term outcome in 2009 was similar for both regions: one of the deepest recessions in decades. At the same time, the worst case scenario of a fully-fledged financial meltdown occurred neither in the CESEE region nor in Latin America.