Bloomberg Línea — Latin America’s weight in the world economy has declined sharply in the last decade, while the weight of Asia, and specifically of China, have been gaining ground.
One of the main causes of the decline of Latin America’s clout is due to a severe decline in Brazil’s economic output during the last 10 years.
The International Monetary Fund (IMF) indicates that the economies of Latin America and the Caribbean as a whole represent between 5.26% of the world’s Gross Domestic Product (GDP), according to the IMF’s latest report, published in April.
A decade ago, the region’s combined GDP accounted for 7.95% of the world’s GDP. In other words, the importance of Latin America and the Caribbean in the world economy has dropped by 33.85% in just 10 years.
According to the IMF, Brazil’s GDP declined from $2.46 trillion in 2012 to $1.83 trillion in 2022. Thus, its share of all goods and services produced in the world went from 3.27% to 1.76%. In other words, it plummeted by 46%.
Mexico, Latin America’s second-largest economy, accounts for 1.16% of the world’s goods and services output, a drop of 34.25% over the last 10 years.
And while Brazil, Mexico and Latin America in general saw their contribution to the global economy drop, China’s advanced, currently contributing 19.17% to global GDP, up 68.6% compared to a decade ago.
Bloomberg Línea carried out a survey of the GDP of each major Latin American economy, and its relevance to the global economy, taking into account the data published by the IMF in April.
GDP per country
Brazil is the region’s largest economy (with $1.83 trillion GDP), followed by Mexico ($ 1.32 trillion), with Argentina in third place, with GDP in 2022, according to the IMF, of $564.27 billion, contributing 0.54% to global GDP.
As in the case of Brazil, Argentina’s GDP is nominally lower than it was 10 years ago (almost $580 billion in 2012). In both cases, the situation becomes even more dramatic if we consider the population growth of these years and that inflation in US dollars means that, even if the size of the economy were nominally the same, there would be a real deterioration.
The fourth largest economy in the region is Colombia, which contributes almost $351.28 billion, or 0.34% of global GDP. Colombia’s nominal GDP in dollar terms is also smaller than it was 10 years ago, when it was almost $371 billion.
The top five Latin American economies is rounded out by Chile, with GDP for 2022 of $317.59 billion, or 0.31% of global GDP. However, in contrast to what has happened in the above mentioned countries, Chile’s GDP saw a nominal increase of 18% during the last decade, having totaled $269.37 billion in 2012, but which did not surpass dollar inflation during that time.
Outside the top five Latin American economies are the following countries, ranked in order of GDP:
- Perú: $240.34 billion
- Ecuador: $115.46 billion
- Dominican Republic: $109.08 billion
- Guatemala: $91.01 billion
- Panama: $70.49 billion
- Costa Rica: $65.31 billion
- Uruguay: $64.28 billion
- Venezuela: $49.08 billion
- Paraguay: $41.93 billion
- Bolivia: $41.03 billion
- El Salvador: $30.72 billion
- Honduras: $30.11 billion
- Nicaragua: $15.76 billion
In addition, the countries of the Caribbean and Central America where neither Spanish nor Portuguese is spoken add some $108.73 billion to the region’s GDP as a whole. Among them, the largest economy is Trinidad and Tobago, with GDP of $25.34 billion.
If Puerto Rico is added as part of the region (but which the IMF does not include), the US territory would add another $116.76 billion to the region’s GDP.
Latin America, lagging behind the world
According to IMF figures published in April, global GDP totaled $103.87 trillion, an increase of 38.27% over the last decade, showing that, as Latin America as a whole contracted economically, the rest of the planet grew.
The countries with the largest contribution to global GDP are the US, with $25.30 trillion, or 24.4% of the total, and China, with $19.9 trillion. In third and fourth place are Japan and Germany, but India is expected to move into third place by 2030.