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Uruguay and Colombia have best ‘business climate’ in Latin America

Monday, August 22nd 2011 - 06:55 UTC
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Latam’s two largest economies, Brazil and Mexico had poor ratings Latam’s two largest economies, Brazil and Mexico had poor ratings

Business climate remained stable in Latin America during the second quarter of the year in spite of signs of the incipient global financial crisis, according to the Brazilian Foundation and think-tank Getulio Vargas. Uruguay and Colombia led the pack of the most pro-business countries in the region.

The so called Business Climate Index, ICE, in July was 5.6 points, the same level as April but below the 6 points of July 2010, a record high, according to the poll which includes interviews with 145 experts from 18 different countries and done on a quarterly basis by the Getulio Vargas Foundation together with the German Economic Research Institute (IFO) from the prestigious Munich university.

“The index was showing a slight declination in the last quarters from the 6 points of 2010, but remained stable in the last three months” said the official release. Both the Current Index, ISA, as the Expectations Index, IE also remained stable in April and July.

“Latin America remains in the growth zone of the economic cycle, but the declination of indexes along the previous quarters suggests a more cautious scenario than in July 2010”, adds the report which nevertheless points out that the business climate is rapidly contracting in the developed countries thus suggesting ‘caution’ regarding Latin America, one of the regions that has proved most resilient to the 2009 and current crises.

The countries in Latin America with the best marks last July were: Uruguay, 7.5; Colombia, 7.4; Chile, 7.2 and Paraguay, 6.7. However while the Colombian index soared from 6.5 in April to 7.4 in July and Uruguay, from 7 to 7.5, Chile experienced a reduction from 7.4 to 7.2 and Paraguay dropped from 7.0 to 6.7 points.

Among those countries experiencing a boom and in which the declination was significant are Argentina which fell from 6.4 to 5.9 points, and Peru from 6.5 to 6.1. In Ecuador the ICE was up to 5.6 from 5.2 last April.

Venezuela was up from 2.2 in April to 4 points in July and Bolivia up from 3.9 to 4.6 showed one of the best overall readings for the quarter.

However the region’s two main economies suffered a pronounced setback: Brazil was down from 6.7 in January to 5.9 in April and now to 5.8 in July, which is below the average ICE for the country in the last ten years,+

As to Mexico, second largest economy, it dropped from 5.6 to 5.2 points.

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