The History And Opportunity Of Latin American Emerging Markets

Over the last six years, Latin America saw a downturn in growth and investment. After years of turbulence economically, a rise in commodity prices has offered the promise of stability in Latin American business sectors.
Overcoming the debt crisis, inflation, and domestic political instability, Latin America has become an emerging country at the top of investors agendas. As emerging countries represent the majority of the world’s population, investors have come to recognize that when it comes to the world’s economy, that is where the growth is. Today, the region has a combined population of about 630 million, which is expected to increase to 800 million in the next twenty years. As growth expands across the country, the middle-class will expand and outsize the need for consumer durables, housing, and mobility. Booz-Allen & Hamilton predict that emerging countries represent a sizable portion of the growth in consumer durables over the next ten years.

In Latin America, specifically, growth prospects range from 4 to 5 percent per year, about two times the expected growth rate for developed countries. This growth will see unparalleled investments in infrastructure, attracting engineering and construction companies looking to capitalize on the growth opportunities available in emerging countries.

Emerging countries, such as Latin America, provide investment opportunities in the stock market as well. Although more volatile than developed countries markets, stocks for developing countries offer the potential of higher returns. For larger investors, the reward of the risk makes it all the more attractive.

As investment opportunities continue to unfold, the World Bank continues to advocate the need for greater collaboration between countries to help foster long-term economic growth and reduce poverty.
Latin America has also shown the potential for growth and innovation in venture capital and other capital markets. With a significant portion of the population being young people, innovation as a way to grow business should be expected.

As Latin America’s potential continues to become apparent and key emerging markets are identified, global networks expand and complex markets form. While businesses investing in the area will have to key their eyes open and aware of any potential institutional weaknesses or political uncertainty, value will be added to the community in the long-term leading to overall improvement and progress economically, politically, and internationally.

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