Confronting the crisis. The Central American Isthmus and the Dominican Republic: Economic evolution during 2008 and prospects for 2009 (Preliminary Evaluation)

The analysis of the economic evolution of the Central American Isthmus and the Dominican Republic, elaborated once a year by the Economic Commission for Latin America and the Caribbean (ECLAC), has a new significance in 2009. The recent financial and economic international crisis, which has been the deepest in the last eight decades, demands a detailed analysis of its effects on the subregion. The economic activity, employment and economic welfare have been already significantly undermined.

As in previous editions, this document examines the recent economic evolution and short-term perspectives of the Central American Isthmus and the Dominican Republic. Yet this edition has extended the macroeconomic analysis and the analysis of the social and sectoral effects of the crisis, as well as policy recommendations to face the crisis.

First, this document explores briefly the structural causes of the international crisis, which are based on macroeconomic imbalances accumulated during several decades in developed economies, particularly in the United States. Similarly, deregulation of the financial sector is identified as the other main pillar of a crisis that was developed during the last years.