South America Economy

By: EconomyWatch Content   Date: 17 March 2010

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Although South America has not escaped the economic crisis of 2008-2009, it has been relatively resilient to the crisis compared to other nations. While the overall GDP of the region shrunk by 3.6% in 2009, the Latin American countries rebounded from the shock rapidly. The rate of recovery is projected to be significant in 2010, as trade with China and the US is expected to reach massive proportions. Also, countries such as South Korea, Vietnam, Russia and India are targeting Latin America as a viable investment and development proposition. Renewable energy sectors are giving South America newer opportunities for foreign investors to boost their respective nations’ renewable energy resources. However, Latin American countries must display strong political stability and mitigate the risks for foreign capital investments. Public-private partnership initiatives are also moving at a rapid pace in South America than in the US, where investments can meet the growing demands of infrastructure development.

South American Economies: Country Outlook

Argentina: Argentina is set to experience unprecedented growth in the energy and agribusiness sectors. The financial equation in Argentina could change due to potential funding needs from the public sector. However, some institutional changes and increasing disputes between the government and the business sector could derail the Argentine state of economy and investments in the short term.

Brazil: Brazil’s economy is growing steadily with activities in the energy sectors, and surge in mergers and acquisitions. Being the largest economy in the region, investments are picking up, and the oil and gas sectors are expected to be the largest beneficiaries. However, much of the economic development is subject to approval of some key bills in the Senate.

Chile: Chile’s economy has remained quite stable despite the recession. The economy is set for a boost in 2010 with growth in renewable energy opportunities.

Colombia: Colombia’s economy is known to encourage free markets and private participation. Being a key foreign investment destination for the US, 2010 promises to augur well for the approval of the US – Colombia Free Trade Agreement by the US Congress.

Peru: Peru expects strong economic growth in 2010 due to its reputation of being one of the most sustainable economies in the Latin American region. Peru’s banking system is one of the most robust ones in the world.

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