a drop in oil prices), Mexico, Ecuador and Columbia. Tourist
receipts also declined, though to a lesser extent, and affected a
limited number of countries. (iv) A sharp drop in the value of FDI
from their historical peak in 2008 was due to the large decline in the
prices of primary commodities. (v) A substantial drop in portfolio
inflows, coincided with the spread of the banking crisis in the
advanced economies, and an increase in capital outflows from the
region. The issue of bonds on the international market diminished
from 41 billion US$ in 2007 to 13 billion for the first half of 2009.
As a result, the net capital inflow became negative by between 5 and
10 billion US$ per trimester since the second semester of 2008. The
related outflows also caused a drop in the stock market indexes
which collapsed from an average of 500 in May 2008 to below 200
by mid-November, to recover slightly in early 2009. As a result, it is
estimated that the net reserves of the region, which had reached the
exceptional level of 500 billion US$ in mid-2008, started to decline.
(vi) An average increase in interest rate spreads by 500 basic points
between the lowest level reached in 2007 and the first trimester of
2009 occurred, though the increase was considerably lower than
that (1100 and 1400 basic points) observed during the Russian and
Argentinean crisis of 1998-99 and 2001-02, during which the
fundamentals of the region were more fragile. The spreads have
started to decline, but are still well above the pre-crisis level.
These external shocks have weakened the balance of payments and
revenue collection and, with it, the budget deficit. As a result, the
regional budget and current account deficit will reach (a tolerable) -
2.5% of GDP in 2009. Much of the increase in the fiscal deficit is
due to a drop in tax and non-tax revenue, rather than to greater
public expenditure. As noted by the 2009 ECLAC (2009) study by
Gomez-Sabatini and Jimenez, the decline in revenue collection
varies with the economic and tax structure of the different
countries^57. Commodity exporting countries are expected to see
their revenue/GDP ratio fall by 3.8% (for the reasons given in
section 2 and in footnote 17) while in the others the revenue/GDP
(^57) The countries most affected are those high dependent on natural resources,
with already low tax/GDP ratios, mainly depending on import taxes and VAT,
and low proportion of income tax in the total (CEPAL 2009a).