This paper investigates the short-run effects of the 2007–09 global financial crisis on GDP growth in least-developed countries (LDCs) compared to the effects on other low income countries and lower middle income countries. Thispaper shows that for many individual LDCs, 2009 was not extraordinarily bad. The output shock following the financial and economic crisis was less than expected and hit LDCs less than other developing countries. Moreover, the growth declines are on average well explained by the collapse in export demand. In two years, the volume of world trade fell by a third. Finally, there are few robust relationships between the annual cross-country growth variation between 2007 and 2009, and the variables reflecting policy and structural environment. The main exception is foreign aid that has mitigated the negative impact of external shocks on economic growth in LDCs.