Economy on the rise in Latin America
Article 3 minute read

Economy on the rise in Latin America

19 October 2018

The United Nations along with the Economic Development Division of the Economic Commission for Latin America and the Caribbean (ECLAC) has issued the 2018 Economic Survey of Latin America and the Caribbean.

The report has shown that the economies of Latin America and the Caribbean will grow by an average of 1.5% this year because of private consumption and an increase in investment. 

The global economy is expected to grow at a rate of about 3.3% in 2018 but uncertainties about future growth dynamics have increased. There has been a lot of change in Latin American countries helping to raise their economies. In ten different countries there have been changes in the leaders or presidents, which has resulted in dramatic changes. 

Chile 

In 2017, Chile elected a new president and has built a new economy for the country. This year, there are more plans to grow Chile and to receive new investors. 

The Economic Commission for Latin America and the Caribbean (ECLAC), is very optimistic for this year. FDI flows are expected to increase with previously announced projects in the renewable energy sector and due to the positive outlook in copper price trends since 2017.

Ecuador 

With new leadership in Ecuador and changes in tax regulations, the country is expecting to grow fast. There is a level of trust for the new government which is expected to aid in the growth. 

Argentina 

There have been problems with inflation in Argentina and the devaluation of the Argentina Pesos. This has forced companies to look for new strategies to cut costs internally and to implement best practices. 

Colombia

The economy in Colombia is growing not only with new national and multinationals companies but companies from within Latin America. There are many incentives that are helping to bring business into the country and ultimately grow the economy. 

Some of these incentives are:

  • thirteen free trade agreements,
  • new potential industries to invest in, such as software and information technology services, metal mechanics, agribusiness, tourism, pharmaceutical industry and investment funds, 
  • one of the most competitive free trade zone regimes in the region.

Mexico

A new president in Mexico has positively affected the economic situation and helped to place the country as number two in the Latin American market. There are great incentives to new businesses as well as a good relationship with exporting to the US.

Brazil

Brazil’s status is different than the other countries in Latin America due to political corruption. The hope is that there will be a new president picked that will be good for the economy of Brazil and attract more investment in the county.

Benefits of investment in LATAM

Countries in Latin America know that they must provide incentives for businesses to come to their countries. Investors are looking for low risk investments with better results. The benefits could be tax incentives or labour incentives. For example, in Argentina and Brazil, there are geographic areas where businesses can pay less taxes. In Uruguay, there are free zones that give tax benefits. Paraguay has benefits that can cut energy costs which can help businesses in certain industries save money.

Many countries in LATAM have invested heavily in education to create a skilled, professional workforce. They have focused on implementing new industries that will help attract businesses from around the world.

TMF Group

TMF Group has offices in Brazil, Mexico, Colombia, Argentina, Ecuador, Chile and in over 80 other countries around the world. The local experts in each country have the knowledge to help support businesses that want to set up new entities, be compliant with all local regulations and to understand the world of global business. Our professionals have an enviable breadth of experience and local contacts to help you maximise new business opportunities.

Contact us for more information. 

Written by

Fredson Justo

Sub-regional Director for the South

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