When it comes to the crisis, most of the media attention is
focused on advanced and emerging market countries. But low-
income countries have been badly hit too, reflecting their
growing integration in the world economy. We can see sharp
declines in exports, FDI, tourism, and remittances. Output
growth in 2009 will be less than half of the pre-crisis rate of
over 5 percent. Sub-Saharan Africa is the worst affected, with a
contraction of real per capita GDP of almost 1 percent. This is
the bad news. But there is some good news in all of this. Low-
income countries have been able to use fiscal policy as a
countercyclical tool this time around, far more than in the
past. Fiscal deficits are expected to increase in three-quarters
of low-income countries in 2009, with an average expansion of 3
percent of GDP. Revenues have grown slower than GDP, reflecting
the disproportionate impact of the crisis on trade and commodity
revenues, as well as weakening tax compliance. Expenditures are
expected to increase by about 2 p