On the heels of a major financial crisis that originated in advanced country markets in 2007, the global economy sank

in 2008 09 into the deepest recession since World War II

mortgage-related assets. were drawn into the storm .Emerging markets and low income countries. which had been relatively sheltered from financial strains owing to their limited exposure to U.S.

International credit markets. and many foreign exchange markets also came under heavy pressure . trade finance.

This heightened financial stress led to an unprecedented contraction in global output and trade in FY2009 and was transmitted through a range of channels .

They got hit by the strongest ever recession in recent times.They started out as amongst the biggest beneficiaries from recent attempts at globalization. And they bore the brunt. Emerging Economies. And they have come out stronger .

Rich Mineral and commodities base Manufacturing Oil .Brazil.

What hit Brazil Credit Markets came to a halt. The Price of Oil fell by over half. riding on falling external demand . in less than a year Export market spiraled inwards. Capital Flow dwindled to a trickle. Tourism and Foreign Remittances fell off the grid. Some sectors saw capital flight.

The pained economy Massive sell-offs in equity markets Spike in funding costs Increased spreads on both corporate as well as sovereign debt Property markets declined High government expenditure plans were pressed into service This pressured the boom years earnings The capital flight triggered sharp depreciation of the currency in mid FY2009 .

Policy responses Both. Fiscal Spending. Push on liquidity. the Monetary as well as Fiscal policies were sent into action Interest rates were lowered by the central bank This was in conjunction with heightened spending programs by the government Attempt to resuscitate credit markets. .

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