The Great Recession in South America, as it mainly consists of commodity exporters, was not directly affected by the financial turmoil, even if the bond markets of Brazil, Argentina, Colombia and Venezuela have been hit.
On the other hand, the continent experienced a tough agricultural crisis at the beginning of 2008. Food prices have increased a lot, due to a lack of arable land. One of the main reasons for the loss of agricultural land was the high value offered by the production of biofuels. However, second generation biofuel processes is slowly being implemented in order to extend the amount of biofuel that can be produced sustainably by using biomass consisting of the residual non-food parts of current crops, such as stems, leaves and husks. Other crops that are not used for food purposes (non food crops), such as switchgrass, grass, jatropha, whole crop maize, and miscanthus could be used to produce biofuels without starving the population that are dependent on food products. Industry waste products (i.e., woodchips, skins and pulp) from fruit pressing would also replace the need to waste arable land for biofuels; possibly improving the South American economy. Food prices, rising since 2002, ascended from 2006, reaching a peak during the first quarter of 2008. In one year the average price of food rose by about 50%.
While previously thought immune to the global financial crisis, the economy of Brazil shrank 3.5% in the fourth quarter of 2008, with industrial production in January 2009, 17.2% below that of January 2008. Growth for 2008 as a whole was 5.1%. Capital spending fell 9.8% in the fourth quarter while household consumption fell 2% from the third quarter. Another report, in The Wall Street Journal, showed drop in gross domestic product of 13.6% in the 4th quarter of 2008 on an annualized rate and a drop in industrial production for December, 2008 to a rate 18.6% lower than December 2007, with a loss of over 700,000 jobs between November 2008 and February 2009.
As the second-largest economy in South America and an important exporter of both machinery and agricultural goods, Argentina has been affected by the global slowdown. The country has been seeing slower economic growth recently, seeing its growth rate forecast reduced from nearly 7% in 2008 to 0% in 2009, and due to the steep drop in commodities prices, plus a long, damaging drought in the farm provinces, local economists believe the country may fall into recession. To combat the effects of the financial crisis, the government announced a $32 billion stimulus package that is intended to create some 380,000 jobs and favor small and medium-sized businesses, with investment in infrastructure, gas pipelines and electricity generators, as well as the completion by 2010 of a new nuclear power plant. However, former President Néstor Kirchner, the husband of the current president, Cristina Fernández de Kirchner and leader of the ruling Justicialist Party, said in a speech on February 17, 2009, that due to the international crisis, Argentina in 2009 will face "the most difficult year in the last century."
The International Monetary Fund (IMF) said as soon as February 2008 that a U.S. slowdown would hurt the economies of the Caribbean Islands, especially those in the Eastern Islands. Indeed, the tourism sector makes up a large part of the Islands' economies, so that they are heavily dependent on the number of U.S. visitors each year. However, the lower inflation and currency depreciation in several Latin American and Caribbean nations can have offset this impact of the financial crisis, sustaining the activity.
Timeline of the Great Recession across all continents
The table below displays all national recessions appearing in 2006-2013 (for the 71 countries with available data), according to the common recession definition, saying that a recession occurred whenever seasonally adjusted real GDP contracts quarter on quarter, through minimum two consecutive quarters. Only 11 out of the 71 listed countries with quarterly GDP data (Poland, Slovakia, Moldova, India, China, South Korea, Indonesia, Australia, Uruguay, Colombia and Bolivia) escaped a recession in this time period.
The few recessions appearing early in 2006-07 are commonly never associated to be part of the Great Recession, which is illustrated by the fact that only two countries (Iceland and Jamaica) were in recession in Q4-2007.
One year before the maximum, in Q1-2008, only six countries were in recession (Iceland, Sweden, Finland, Ireland, Portugal and New Zealand). The number of countries in recession was 25 in Q2‑2008, 39 in Q3‑2008 and 53 in Q4‑2008. At the steepest part of the Great Recession in Q1‑2009, a total of 59 out of 71 countries were simultaneously in recession. The number of countries in recession was 37 in Q2‑2009, 13 in Q3‑2009 and 11 in Q4‑2009. One year after the maximum, in Q1‑2010, only seven countries were in recession (Greece, Croatia, Romania, Iceland, Jamaica, Venezuela and Belize).
The recession data for the overall G20-zone (representing 85% of all GWP), depict that the Great Recession existed as a global recession throughout Q3‑2008 until Q1‑2009.
Subsequent follow-up recessions in 2010‑2013 were confined to Belize, El Salvador, Paraguay, Jamaica, Japan, Taiwan, New Zealand and 24 out of 50 European countries (including Greece). As of October 2014, only five out of the 71 countries with available quarterly data (Cyprus, Italy, Croatia, Belize and El Salvador), were still in ongoing recessions. The many follow-up recessions hitting the European countries, are commonly referred to as being direct repercussions of the European sovereign‑debt crisis.
2006-Q1Q1-2006 until Q2-2006 (6 months) Q1-2007 until Q3-2007 (9 months) Q4-2008 until Q1-2009 (6 months) Q4-2009 until Q1-2010 (6 months) Q1-2011 until Q2-2011 (6 months) Q2-2013 until Ongoing (48 months)
^ abOnly seasonally adjusted qoq-data can be used to accurately determine recession periods. When quarterly change is calculated by comparing quarters with the same quarter of last year, this results only in an aggregated -often delayed- indication, because of being a product of all quarterly changes taking place since the same quarter last year. Currently there is no seasonal adjusted qoq-data available for Greece and Macedonia, which is why the table display the recession intervals for these two countries only based upon the alternative indicative data format.
^Bolivia had as of January 2014 only published seasonally adjusted real GDP data until Q1-2010, with the statistics office still to publish data for 2010-13.
^According to the methodology note for the quarterly GDP of El Salvador, this data series include seasonally adjustments.
^The G20-zone represents 85% of all GWP, and comprise 19 member states (incl. UK, France, Germany and Italy) along with the EU Commission as the 20th member, who represents the remaining 24 EU member states in the forum.
^Kazakhstan had as of January 2014 only published seasonally adjusted real GDP data until Q4-2009, with the statistics office still to publish data for 2010-13.
^Moldova had as of January 2014 only published seasonally adjusted real GDP data until Q4-2010, with the statistics office still to publish data for 2011-13.