Latin America's Growth Economy

Hi everybody, I am Juan, probably the newest member of the ECLP community – an early starter to the ECLP class of 2014. I am a University of Oxford MBA graduate with seven years of experience in business development, consulting, and private equity capacities across the US, Saudi Arabia, and Colombia.  I joined GE Capital EMEA nine months ago with the Equity team, and as of last week, transitioned into my ECLP role contributing to the roll-out of Access GE in Europe.

In light of the upcoming Global ECLP Conference in Argentina, and having been born and raised in Colombia, Kevin Richards (2013 Capital EMEA, London) invited me to share with you a quick intro to Latin America’s economy. I am excited to have joined the ECLP and share my thoughts with you!

~ Juan Andrés García Alvarez, ECLP, 2014 Capital EMEA, London

Latin America’s Growth Economy

Latin America is a bright spot in today’s global economy. 

While the Eurozone struggles with its debt crisis and the US faces various political battles, Latin America is well positioned to make the 2010s one of its best decades ever. 

Unlike advanced economies, most Latin America’s economies were only slightly hurt during the economic crisis. Sound macroeconomic policies, resilient domestic demand, strong credit expansion, and favourable commodity-based trade, have replaced the boom-and-bust cycles of the past. 

Latin America keeps growing, despite the deceleration of its growth rates. According to the EIU, Latin America will grow 3.5% in 2012, compared to -1.2% in the Euro area, and 1.8% in the US. 

Nevertheless, several economic challenges remain. They include, but are not limited to: 

• Infrastructure and Logistics: This FT special issue reports how the movement of bulk goods and growing trade volume with China is imposing demands on Latin America’s network of road, rail and shipping terminals.  
• Productivity and Operations Performance: McKinsey calls for Latin America’s cities to enhance productivity measures and generate jobs in the formal economy, to boost sustained urban economic growth.  
• Currency Appreciation: Latin America’s countries are concerned about the impact of international currency wars on its competitiveness. Tightening of monetary policy is expected to follow. 

Despite the above challenges, Latin America is now recognized as a dynamic global player. GE is aware of the region’s potential, and I am excited to see what investments will be made to drive growth. According to the 2010 Annual Report, GE’s Latin America’s revenues grew 18% between 2009 and 2010.

Comments

[Steve]

Juan, welcome to the team! Thanks for a great post and the links to more insights on LATAM. Should be an excellent learning experience for us all.