The climate for business in Latin America has reached a three year high, according to a recent analysis. Photo is a map of Latin America

Climate for Business in Latin America Best in 3 Yrs: Report

The climate for doing business in Latin America is the best it has been in more than three years, according to a report released by a leading Brazilian economic institute.

A photo of Aregua in Paraguay, which has been highlighted as having the best climate for business in Latin America by a recent analysis
Paraguay has a strong business climate

According to newly released analysis from the Getulio Vargas Foundation (FGV), among ten major countries from Latin America, the overall business climate in the Q3 of 2021 is the best it has been since Q1 of 2018.

That suggests the environment for doing business in Latin America is currently stronger than it was long before the global pandemic struck.

FGV’s analysis looks at factors such as the supply of inputs and raw materials for business, as well as commodity prices. Results are based on a measure referred to as ‘Economic Climate Indicator’ (ICE), which is calculated based on an average between present business conditions and predicted conditions, known as ‘Current Situation Indicators’ (ISA) and ‘Expectations Indicators’ (IE).

The countries analysed included Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, and Uruguay. Between Q2 and Q3 of 2021, all of the countries surveyed registered an improvement in ICE, which is based on a 100-point “neutrality scale”. 

Overall, the region has registered five consecutive quarters of improvement on that scale, to hit an average score of 99.7 this quarter. That is the highest score since the regional average reached 101.5 in 2018.

Among them, Paraguay was the standout performer, registering an ICE score of 125.1 — a significant rise on the score of 100.0 it registered in the previous quarter which consolidates its status as having the best climate for business in Latin America, according to FGV.

SEE ALSO: How to Incorporate a Company in Paraguay

Other strong performers for Q3 included Brazil (116.5 points), Chile (104.1), Peru (102), and Colombia (101.1). 

Brazil’s 34.3 point rise compared to Q2 saw it move up two places into second position among those countries surveyed, while Peru’s 21.1 rise saw it move into fourth position, having occupied sixth last quarter.

Elsewhere, Ecuador registered the second greatest improvement since last quarter among all of the countries analysed, gaining 26.2 points to reach 77.9. That suggests the country’s recently elected pro-business President Guillermo Lasso has overseen a significant improvement in business climate in the country.

A graph showing recent ICE scores in selected Latin American countries. New analysis suggests the climate for business in Latin America is the best in over three years.
A graph showing recent ICE scores in selected Latin American countries

Improving business climate good news for investors

The encouraging results of this latest analysis from FGV point to a bright future for investment and business in Latin America, as economies throughout the region continue to reactivate following the turmoil of the global pandemic.

With all of the countries surveyed registering improvements on the previous quarter, and the overall climate for business in Latin America now the best it has been since Q1 of 2018, the signs for investors are highly encouraging.

Notably, prior to Q4 of 2017, the last time the region registered a score higher than the current quarter was Q3 in 2013. While, five consecutive quarters without any decline is the most sustained improvement seen in the climate for business in Latin America recorded, with analysis going back to Q3 of 2011.

With many economies in Latin America expected to grow and bounce back from the ructions of the pandemic in the latter part of 2021, and others in early 2022, the future prospects for doing business in the region appear to be very strong.

Biz Latin Hub can assist you doing business in Latin America

At Biz Latin Hub, our multilingual teams of corporate support specialists have the experience and expertise to help you launch and do business in Latin America. We have teams in place in 18 markets around the region, offering a comprehensive portfolio of back-office services, including company formation, accounting & taxation, legal services, hiring & PEO, and visa processing. 

Contact us today to discuss how we can help you reach your business goals.

Or read about our team and expert authors.

Key services offered by BLH including legal services, accounting & taxation, hiring & PEO, due diligence, tax advisory, and visa processing
Key services offered by Biz Latin Hub

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Craig Dempsey

Craig Dempsey

Craig is a seasoned business professional in Latin America. He is the Managing Director and Co-Founder of the Biz Latin Hub Group that specializes in the provision market entry and back office services. Craig holds a degree in Mechanical Engineering, with honors and a Master's Degree in Project Management from the University of New South Wales. Craig is also an active board member on the Australian Colombian Business Council, and likewise also active with the Australian Latin American Business Council.

Craig is also a military veteran, having served in the Australian military on numerous overseas missions and also a former mining executive with experience in various overseas jurisdictions, including, Canada, Australia, Peru and Colombia.

Receive the latest news and advice about expanding your business globally
Subscribe to our newsletter to receive the latest business news and advice about entity formation, legal entity compliance, accounting, back office and fiscal requirements. Receive the latest news and advice about expanding your business globally.

This field is for validation purposes and should be left unchanged.