Central and South America Economic Situation

The economy of Central and South America is experiencing some new changes and challenges. In recent years, some countries in the region have made significant progress, but others still face economic problems.

Brazil and Mexico are the two largest economies in the Central and South American region, with their combined economic size accounting for over 70% of the region's total economy. Brazil's economic growth rate reached 4.3% in 2021, while Mexico faced the impact of the COVID-19 pandemic and had a lower growth rate of only 2.3%.

In addition, countries such as Chile and Colombia are also developing and growing. Chile's economic growth rate reached 6% in 2021, while Colombia's growth rate was 3.5%. The economic growth of these countries is mainly benefited by their stable political environment and active promotion of foreign trade.

According to the investigation on the economy of Central and South America, Panama and Belize are the two countries mentioned. Panama has a good air environment and attracts a large amount of foreign investment and wealthy people despite having little industry. With the world's most important chokepoint - the Panama Canal, the small population of Panama can live comfortably, as the canal generates one-third of the country's entire economy, an engineering miracle connecting the Pacific and Atlantic oceans.

The country has a population of 4.5 million, with most being a mix of Europeans and indigenous people, and nearly half living in the capital, Panama City. Before the COVID-19 pandemic, the tourism industry had been an important pillar of the Panamanian economy. For example, in 2019, the tourism industry contributed about 16% to Panama's gross domestic product. However, due to the pandemic's impact, economic activities at the Panama Canal decreased, and the tourism industry suffered. Travel restrictions led to the impact on the tourism and service industries, as well as the manufacturing and export sectors. Panama's GDP fell nearly 18% in 2020.

As of 2021, Panama's economy is gradually recovering, and it is expected that the country's inflation rate will increase from 1.5% in 2021 to 3.5% in 2022. The Panamanian government also plans to continue investing in infrastructure in 2022, including projects such as ports, highways, and airports, which is expected to further boost the country's economic growth.

Belize's economy traditionally relies on forestry, especially sugar, citrus fruits, cocoa, rice, and tobacco. Tourism, fisheries, and agriculture are the main sources of the country's economy. According to World Bank data, Belize's GDP was approximately $2.2 billion in 2019. In 2021, Belize's GDP was $1.323 billion, with a GDP per capita of $3,075 and a growth rate of 9.8%.

However, Belize's economic development is facing challenges due to insufficient diversification, inadequate infrastructure, outdated technology, and an unstable labor market. This problem also limits Belize's development trend. Under the impact of the COVID-19 pandemic, Belize's economy has been affected, with tourism and service industries suffering the most, while agriculture and fisheries remain relatively stable. The Belizean government has implemented a series of economic stimulus measures, such as providing economic assistance and tax relief, to alleviate the pandemic's impact on the economy. It is expected that Belize's economy will gradually recover and achieve moderate growth in the coming years.

In addition, countries like Chile and Colombia are constantly developing and growing. Chile's economic growth rate reached 6% in 2021, while Colombia's economic growth rate was 3.5%. The economic growth of these countries is mainly benefited from their stable political environment and active promotion of foreign trade.

However, there are also economic challenges in the Central and South American region. The economic growth rates of some small economies are still very low, and some countries are even in an economic crisis. Although the government has taken measures to strengthen support for the economy and promote growth, these measures are not enough to completely alleviate the challenges these countries face.

Another issue that needs attention is that the poverty rate in the Central and South American region is still high, especially in rural areas. The government is making efforts to take measures to improve poverty and raise social welfare levels, including increasing infrastructure investment and expanding social welfare programs.

Overall, the economic situation in the Central and South American region is diverse and complex. Governments need to take measures to support economic growth and reduce poverty rates to ensure the region's economic stability and sustainable development. Meanwhile, the Central and South American region also needs to continue to promote trade and investment to attract more foreign capital and technological innovation and promote faster economic development.

Reference:

World Trade Center Association, "Global Outlook 2020 - Central and South America: Global Supply Chains and Regional Cooperation."

Central and South America move towards a new era, as Brazil and China use a currency other than the US dollar for their transactions.