An in-depth report on Latin America's business and economic outlook in 2008.
BY JOACHIM BAMRUD
Latin America’s economies may be slowing down slightly from 2007 and the U.S. sub prime crisis looms, but the corporate sector in the region is anything but bullish, thanks to another strong year.
“In general, the South American economies remain strong,” says Maureen Kempston Darkes, president of General Motors’ Latin America, Africa and Middle East division. “GM and the industry [were] expected to hit record sales volumes in 2007, and the growth is expected to continue in 2008. With our global product portfolio, GM is well-positioned to take advantage of this growth.”
Rui da Costa, managing director for Latin America and Caribbean for Hewlett-Packard, concurs. “We are confident Latin America will have another strong year in 2008,” he says. “Though the region still faces important challenges such as the social inequalities and inadequate infrastructure, in general we continue to see strong economic fundamentals as well as progress in the business environment.”
Latin America’s combined economy is expected to grow by 4.3 percent this year, the International Monetary Fund predicts. The World Bank and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) are slightly more optimistic, forecasting growth of 4.5 percent and 4.9 percent, respectively.
“By the end of 2008 the region will have grown by around 30 percent since 2004,” says Peter Rösler, deputy general manager of German business group Ibero-Amerika Verein. “Already now the combined economies of Latin America have the dimension of Germany or China.”
Meanwhile, U.S. firms have invested 10 times as much in Latin America as they have in China, points out John Murphy, executive vice president of the Association of American Chambers of Commerce in Latin America (AACCLA), an organization that represents more than 80 percent U.S. investment in Latin America. “Business will push ahead in the Americas [this] year, investing, trading, and creating jobs,” he says.
Da Costa is particularly bullish on the technology sector (see Latin America 2008: Technology Outlook). Also the financial sector is expressing strong optimism. “We are very optimistic about the business outlook for Latin America in 2008,” says Peter Cardinal, executive vice president for Latin America for Canada-based Scotiabank, which has built up a major presence in the region in recent years. “The Latin American market place is evolving quickly. With a large, young consumer base, growing political and economic stability and more integrated regulatory systems, the Latin American market holds enormous potential.”
And 2008 will likely continue to see the trend among many U.S. multinationals of...
Keywords: Jose Duarte, SAP; Jerry Haar, Florida International University; Bereket Haregot, Chevron; John Price, InfoAmericas; Beatrice Rangel, AMLA Consulting; Jose Antonio Rios, Global Crossing and Navidad Real Estate Holding;
LATIN AMERICA 2008
World Bank: Limited Sub-Prime Effect