The Global Crisis and Its Impact on Developing Countries

Recognizes that since 2007, the world economy has been hit by a series of overlapping crises, beginning with an apparently local crisis in the subprime mortgage market in the United States and gradually extending to the financial sectors of other developed countries, before turning into a global financial crisis, affecting most countries, both developed and developing, with varying degrees of intensity. The impact has been both social and fiscal, and in spite of the differences across countries, there are similarities within regions dependent upon preexisting vulnerabilities. The recent crisis differed from earlier crises, because it had its roots in the financial systems of developed countries, had a global reach, and overlapped with the food and fuel price crises, but its impact on low- and middle-income countries is similar, both in economic terms and in the importance of domestic policies and macroeconomic stance against external shocks.