Discussant Paper
Comment on “Mexico: Large, Immediate Negative Impact and Weak Medium-Term Growth Prospects� Edgardo Favaro
The financial crisis originated in the United States in 2008 and was transmitted rapidly to the rest of the world, resulting in slower global economic growth. The crisis caused a sharp fall in the volume of world trade, 14.4 percent, and major disruption in the financial sectors of several high-income economies. The impact of the crisis among low- and middle-income countries varied. It was less severe among exporters of minerals and agricultural products (e.g., most of Latin America) than among exporters of laborintensive manufactured products (e.g., most of East Asia); it was more severe among countries with large current account deficits (e.g., most countries in Eastern Europe) than among countries with smaller deficits before 2008 (e.g., Latin America and East Asia). To its credit, Mexico was among the latter group as of 2008.
Edgardo Favaro is Lead Economist, Economic Policy and Debt Department, Poverty Reduction and Economic Management Network, World Bank.
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