Trade and financial shocks have worsened Latin America’s economic prospects over the past year. World trade is experiencing stagnation and commodity prices have collapsed. The latter phenomenon and the turmoil in emerging capital markets have led to increased costs and reduced availability of external financing. However, while the commodity shock is likely to last, the financial shock will probably be weaker than during past crises. In any case, Latin America—and South America in particular—will perform poorly both in 2015 and 2016.