Another aspect making a big difference is the performance of emerging economies. Latin America, excluding Chile, posted an average annual fall of 4.2% between 1930 and 1932, while Chile, where the crisis compounded with the downfall of the nitrate industry, fell an average of 17.6%. For the three-year period 2009-2011, private forecasts indicate that Latin America will grow by an average of 1.2%, while Chile will grow by 2.1%. These are just projections, not definitive figures, but data released so far this year indicates that the effects of the crisis, although far from negligible, are much milder than they were in the 1930s. This is an encouraging fact. Usually, whenever developed countries go into a recession, its effects are amplified into our region. That has not been the case this time; on the contrary, our region today is outperforming the developed economies. That the current crisis did not turn into a Great Depression proves that lessons have been learned. Economies are much stronger, and also the policies applied have gone in the proper direction of mitigating the tremendous financial shock of last year. For one thing, the task of stabilizing the financial system was assumed decisively, which prevented its collapse. Uncertainties remain, but are more focused and less dramatic than at the end of last year.
This is precisely what we try to do in our financial stability reports, which allow us to gain an overall vision of vulnerabilities, although, once again, it does not provide a final verdict. Finally, new financial realities require new sets of information to examine, or to compile when not available. 9 Crisis management That this is the worst financial crisis since the Great Depression nobody disputes. Moreover, the initial shock on the global economy does not differ much from the one that hit in the 1930s. There are many similarities in the initial conditions and effects of the two (Eichengreen and O’Rourke, 2009; IMF, 2009). Worth noting are the initial fall in manufacturing output and trade, the collapse of stock prices and credit, and the increase in bond spreads. In their origins there was also the same rapid expansion in credit and financial innovation that increased the leverage of financial intermediaries. These remarkable similarities in the first months of this crisis were alarming. However, both differ in the subsequent evolution of the global economy. 10 Between 1930 and 1932, world activity (measured at PPP) dropped by an average of 4.8%. In particular, the U.S. experienced an average annual fall of 9.9%.