Latin American economies changing position on ranking list23.09.2014
The year 2014 showed some changes of position on the Latin American economies ranking list. Strong as ever, Brazil and Mexico will remain at number 1 and 2. Earlier this year Colombia took over Argentina as Latin America’s 3rd largest economy, which puts Argentine at number 4. Number 5 is Venezuela, but it is at risk to have to hand over its position to stable, growing and highly privatized Chile. The top rankings then will be Brazil, Mexico, Colombia, Argentina, Chile, Venezuela and Peru.
But further changes of position could occur: “With both Argentina and Venezuela on the cusp of a balance of payments crisis, we expect them to slide further down the pecking order,” forecasts emerging markets economist David Rees. “That could eventually see Chile overtake Argentina to become the region’s fourth-largest economy and Venezuela slip behind Peru.”
Colombia's gross domestic product is expected to be close to 5% this year against 3.6% for Argentina. The key driver of this growth, according to analysts, is the construction sector, where investment is rising at a rapid pace. The Andean country has now embarked on a $50 billion program to overhaul its transport infrastructure (12,000 km and $25 billion worth of roads). This project alone is expected to add as much as 1.5% to economic growth during construction. Yet reliance on commodities exports, the importance of the informal economy and security a corruption risks mean that growth is still fragile. Peru shows very strong macroeconomic performance and high levels of efficiency in the goods, financial and labour markets.
In april 2014 the World Economic Forum’s Global Competitiveness Report came up with another ranking list, showing also remarking notes on the topic.