In LatAm’s Poor Showing on Share of World GDP Brazil Does Best

Debt, inflation and Asia’s strong economic growth forced Latinamerica’s share of the world’s GDP to drop 1.8 points in the last quarter of a century, according to international consultants based on IMF/World Bank reports.

Latinamerica’s contribution which represented 7.2% of GDP in 1980 dropped to 5.4% equivalent to 2.5 trillion US dollars.
United States with 4.6% of world population (compared to LatAm’s 8%) has a 28% share of world GDP.

Big changes also happened inside Latinamerica in the last 25 years. Argentina which concentrated 27% of the region’s GDP in 1980, dropped to third place behind Brazil and Mexico and in 2005 represents a modest 7.8%.

Chile on the other hand managed to climb 0.7 points from 3.6% of LatAm’s GDP in 1980 to 4.3% in 2005. Chile’s success in spite of its relatively small economy is based on sound economics, fiscal discipline, low inflation and pioneering trade relations with Asia which spurred strong, sustained expansion.

Brazil leads in the region with a GDP share ranking between 35/37%, and Mexico boomed ahead particularly with oil and the 1994 North American Free Trade Agreement encompassing United States and Mexico.

However Latinamerica’s high foreign debt, US$ 763 billion in 2004 is one of the factors that help to explain the region’s lesser participation worldwide.

"The heavy debt burden plus high interest rates diminished the region’s countries capacity to invest, particularly in infrastructure", said Ricardo Amorim from the Latinamerican branch of international consultants West LB.

Asia’s growing participation from 22.5 to 27.6% also influenced the poor performance of Latinamerica.

"Hyperinflation, balance of payments crisis originated in the implementation of certain economic policies also contributed heavily to the poor showing", argues Alberto Ramos from Goldman Sacks.

Mercopress – www.mercopress.com

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Lula Calls for Mutually Beneficial Relations Between Brazil and Argentina

Brazilian President Luiz Inácio Lula da Silva said that Brazil and Argentina have an ...

Brazilian Landless Ready for 17-day March to Brasí­lia

Leaders of Brazil’s Landless Rural Workers’ Movement (MST) had a meeting, yesterday, with members ...

Brazilian Police Get US$ 10 Million from the US

The government of the United States intends to contribute around US$ 9.863 million (R$ ...

Almost US$ 15 Million Fine for Oil Spill in Brazil

The Oceanus Maritime Agency, responsible for the Bahamian-flag ship, the Saga Mascot, which spilled ...

São Paulo Governor Still Clear Favorite to Be Brazil’s Next President

The governor of São Paulo, José Serra, from the opposition PSDB (Party of the ...

Honda Introduces This Year in Brazil New Flexible Fuel Vehicle

Honda announced today that it has developed a new flexible fuel vehicle (FFV) system ...

World’s 5th: Brazil’s Pre-Salt Oil Might Top 100 Billion Barrels

Pre-salt oil reserves from Brazil, which are already under concession, could reach as much ...

Brazil’s Farming Boom Favors Mostly the Midwest

Income from farming in the main crops in Brazil should reach 160.6 billion Brazilian ...

With Five Racers from Brazil In, Storylines Abound for Brazilians at Indy 500

Immensely popular Hélio Castroneves, whose personality once reenergized a flagging Indy Racing League, is ...