Having survived years of economic turbulence, Latin America is gradually shaking off its dependence on external forces like global commodity and oil prices. The stabilization of commodity markets has coincided with a rise in consumerism in Latin America, along with accelerated growth of economies such as Peru and Chile. In the next decade, the continent will witness a huge growth in digital inclusion, urbanization, middle and affluent classes and cities will have significant contribution to the economic pie. Additionally, declining dependency ratio, advancement of renewable energy capacity and high adoption of disruptive business models like sharing models will restore Latin America’s status as a “next-generation continent.”
This is the findings of a study conducted by Frost & Sullivan, a consulting firm.
Latin America has a significant demographic advantage over regions such as the Middle East, Africa and emerging Europe, and will play a key role in attracting global investment by 2025.
“A significant economy accelerator is the increasing level of mobile connectivity, availability and penetration, making Latin America the second-fastest growing region globally in terms of number of mobile phone lines,” said Renato Pasquini (photo), Frost & Sullivan Digital Transformation Consulting and Research Director. “This enhanced connectivity and relevance of Internet of Things will create opportunities for small- and medium-sized enterprises as well as verticals such as ecommerce, smart factories, digital health-care and digital governance,” added Frost & Sullivan Visionary Innovation Senior Research Analyst Malabika Mandal.
Latin America’s economic revival is not only a result of the steady growth of emerging economies and the region’s strong service sector, but also China’s substantial investment aid.
In sum, the declining long bear commodities market, ubiquitous mobile connectivity, a booming middle class and China’s investments could make Latin America a $7.3 trillion economy by 2025, according to the study.