5 Good Reasons to Do Business in Latin America

An Expert's View about Business Environment in Panama

Posted on: 11 Mar 2013

There are many reports out there that are showing how the current projections for Latin America are just showing growth forecasts.  Here are 5 great reasons to do business in this market.
Economic Growth

Although there are many international crises out there, it is still worthwhile to look into Latin America, where solid growth is expected for 2012. The World Bank projections for the region in 2012 suggest a forecasted increase at about 4%. This is definitely a place to get in and make investments and start purchasing products to export or to start setting up shop to manufacture items.
Expansion of the Middle Class

A study that was completed by the UK Trade and Investment Agency shows that, “there are more than 300 million people in Latin America that are considered to be in the middle class.”  Combined, that is actually more than China and India combined.  Part of the reason that this is occurring is because with the middle class in Latin America, economic growth goes along with it.  Economic growth is something that is really important and that is going to make a huge difference in the expansion of the middle class in Latin America.

It is shown that with a growing middle class, there is a great chance for exporters to actually get more than just manufactured goods and create advanced options.  From that, there are other industries that are bound to be created such as educational products and financial and other professional services, which are the key to creating, maintaining, and growing the middle class.
Fundamentals are Strong

The Economic Commission for Latin America and the Caribbean was created to help with economic development in Latin America.  This committee has found that even with a downturn of the world economy, this area is still set up for success and can rise beyond this.  Don’t let the downturn of the economy throw you off, it is something that can be overcome and is being overcome by these countries.

The strengths that they see are high reserve levels and that will help deal with any issues that are in the area and will help deal with inflation and the chance that it may fall.  When this happens, there is a chance that there will be space for an expansionary monetary policy.  The other thing to note is that no IMF programs have shrunk in that area.
Growth in the Banking System

The nice thing is that the Latin American banking system is growing fast and this is because of 5 different factors.  First, it is because of the growth in the middle class.  Second, it is because of access to an “unbanked” population.  Third, there are large growths in credits and deposits.  Fourth, there is an expanding portfolio of loans.  Lastly, there is a very efficient system for Latin American banks.
Internet Usage is Booming Across Latin America

There are 235.1 million internet users throughout Latin America.  This is one of the areas of the world that has shown strong growth in internet usage.  The internet is being used for all kinds of activities.  Latin Americans are using it for social connection, information, commerce, and communication.  With this growth, it is expected to continue to rise and there is a ton of potential there for more growth.  This is a great sign of growth in this area.  Using the internet is always something that you want to see and it really shows growth and technological strength of that particular area of Latin America.


Posted: 11 March 2013

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Presenting the contributor

Patricia Maroday, Consultant