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Management Report

Management reports, briefs issued by Samsung Economic Research Institute

Latin America’s Economic Resurgence and Its Implications for Korea

Latin America’s Economic Resurgence and Its Implications for Korea

KIM Hwa-Nyeon

Sept. 10, 2007

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Latin America’s economic fortunes have experienced a dramatic change over the past three years. From a widespread economic downturn in 2000 due to an outbreak of labor disputes and a sluggish global economy, the region has averaged 5% economic growth over the past three years on the back of robust global demand for raw materials and energy that are main products of Latin America. Especially, Argentina (average growth rate 8.9% from 2004 to 2006) and Venezuela (avg. growth rate 12.4%) have led the region; Brazil (avg. growth rate about 3.3%), accounting for roughly 31% of the region’s economy, has also sustained solid growth momentum.

Continued economic growth and increased stability have also bolstered stock markets across the region: since 2000, stock prices, on average, have increased 2.5 to 4-fold. For example, Brazil’s BOVESPA index that had surpassed the 10,000 mark in 2002 reached its new high of 50,000 in 2007. Mexico’s IPC index also has steadily moved upward surpassing 30,000 this year. Looking forward, Latin America’s prospects are equally bright with an estimated growth rate around 4.5% in 2007, and solid economic growth projected until 2010.


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