Latin America's 2014 GDP Stars and Laggards
- Catalina Osorio
- Jun 11, 2014
- 3 min read
A few months ago, we provided our readers with a view into which countries were most likely to lead Latin America in terms of economic growth over next five years. See here.
In that post, we featured countries like Peru which stands to achieve consistently robust growth rates around 6% per year, and also mentioned countries like Chile and Colombia which are projecting more modest but still excellent growth rates of around 4.5%.
As data starts to be collected about 2014 growth rates in the region, such as the International Monetary Fund's (IMF) recently released current year survey, the earlier estimates on the top economic
performing countries are holding true. Moreover, the current data shows that growth in the region is highly uneven, with poor-performing large economies like Brazil and Argentina contributing to overall slowing in the region.
A better map of what is occurring was offered earlier this week by Raymond Colitt of Businessweek in an article showing the clear rift between the good and bad performing economies in the region. As Colitt’s analysis shows, large economies like Brazil, Argentina and Venezuela, all of which were enjoying significant growth booms just a few years ago, have fallen into recessionary slides due to, among other things, poor economic policies. By contrast, some of their more prudent neighbors -- like Peru, Colombia and Chile, and even Mexico (which had been lagging behind its neighbors to the south) -- have used disciplined economic approaches to achieve impressive growth.
His map -- which curiously shows a distinct East/West split -- displays the divide well.
The broader implication of the Businessweek map is that it underscores that Latin America is far from a unitary economic region, but rather a set of distinct economies that are performing quite differently. This fact alone has significant implications for companies seeking expansion in the region, including:
Companies must constantly keep apprised of economic developments and trends on a country-by-country basis to understand how markets are likely to respond to their products and services
Studying these trends is key to determining the correct timing of market expansion and investments
Sheer size of economies, while important, should be but one factor in determining where to seek growth. In some circumstances, targeting smaller but growing markets may pay better dividends than blindly investing in larger, shrinking markets
These and other considerations frequently inform Nextant's consulting and sales execution engagements for our clients. See our website more information on our services.
For a downloadable pdf version of this article, please see here
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Andres Snaider is a founding partner of Nextant, a consulting firm specializing in assisting companies expand their businesses in international markets, with a strong focus on Latin America. With a degree in law and experience working as an international attorney and businessman, Andres has advised clients on a range of commercial matters and investments across the Americas. He is a graduate of the Harvard Law School and currently lives and works in Boulder, Colorado.
Email Andres at : asnaider@nextant.com
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Nextant has extensive experience in assisting leading clients through its Market Expansion and Business Optimization services. For more information on how Nextant can assist your company in socializing a market entry and initiating sales, please visit our website at http://www.nextant.com
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