Why There Is Investment Potential in Latin America

A couple of weeks ago, while lamenting the onset of cold weather here in Washington, I discussed the investment potential of Latin America. Since winter does not appear to be ending any time soon, thinking about Latin America still has appeal. While our current local climate in the Washington DC area may not be sunny, the business climate in Latin America is certainly heating up.

One of the more telling economic statistics is the GDP per capita number. The international experience is that once this number hits the $3000 level, countries typically will begin to see the development of a middle class. Once $5000 is achieved, a critical mass develops and middle class growth takes off. The latest World Bank data – using a constant year 2000 US$ – shows that Chile achieved this middle class growth phase in 2002 and Brazil, ending 2009 at $4419, will soon be there. Meanwhile, Colombia with a GDP per capita of $3102 is at the beginning stages of developing a domestic middle class consumer economy and Peru is not far behind at $2913 (as a comparison, the two emerging market headliners of China and India have GDP per capita levels of $2206 and $757, respectively).

With the burgeoning middle class, the region’s domestic economies are beginning to take shape and business confidence is increasing. In an investment world fraught with uncertainty and risk, Latin America, with its growth potential, could contain some unique opportunities for investors

This post was originally published in the Washington Business Journal’s WBJBizBeat Blog. Read more: Why there’s investment potential in Latin America | Washington Business Journal