Preliminary Overview of the Economies of Latin America and the Caribbean 1998

The Latin American and Caribbean region will remember 1998 as one of the most problematic years of recent times. The severe effects of the international financial crisis that broke out in Asia in mid-1997 restricted the region’s access to external financing. Tumbling export prices translated into the first drop in the value of the countries’ exports to be recorded so far this decade, and this in turn led to a further deterioration in the current account of the balance of payments. Faced with this bleak outlook on the external front, economic authorities displayed a strong determination to confront the crisis head on and to build confidence by applying tough monetary, fiscal and exchange-rate policies.