South America - Economy

Economy

During the last two decades, South American countries have experienced significant economic growth, which can be seen in many of these countries with the construction of new skyscrapers like the Gran Costanera tower in Chile, and also transportations systems like the Bogota Metro. However, because of histories of high inflation in nearly all South American countries, interest rates remain high and investment remains low. Interest rates are usually twice that of the United States. For example, interest-rates are about 22% in Venezuela and 23% in Suriname. The exception is Chile, which has been implementing free market economic policies since establishing military dictatorship in 1973 and has been increasing its social spending since the return of democratic rule in the early 1990s. This has led to economic stability and interest rates in the low single digits.

South America relies less on the export of both manufactured goods and natural resources than the world average; merchandise exports from the continent were 16% of GDP on an exchange rate basis, compared to 25% for the world as a whole. Brazil (the seventh largest economy in the world and the largest in South America) leads in terms of merchandise exports at $251 billion, followed by Venezuela at $93 billion, Chile at $86 billion, and Argentina at $84 billion.

The economic gap between the rich and poor in most South American nations is larger than in most other continents. The richest 10% receive over 40% of the nation's income in Bolivia, Brazil, Chile, Colombia, and Paraguay, while the poorest 20% receive 3% or less in Bolivia, Brazil, and Colombia. This wide gap can be seen in many large South American cities where makeshift shacks and slums lie in the vicinity of skyscrapers and upper-class luxury apartments; nearly one in nine in South America live on less than $2 per day (on a purchasing power parity basis).

Country GDP (nominal) in 2011 GDP (PPP) in 2011 GDP (PPP) per capita in 2011 Merchandise exports
($bn), 2011
HDI in 2011 (rank) Percent with less
than $2 (PPP)
per person per day
Argentina 7005447644000000000447,644 7005716419000000000716,419 700417516000000000017,516 700183700000000000083.7 69997970000000000000.797 70002600000000000002.6
Bolivia 700424604000000000024,604 700450904000000000050,904 70034789000000000004,789 70009100000000000009.1 69996630000000000000.663 700124900000000000024.9
Brazil 70062492908000000002,492,908 70062294243000000002,294,243 700411769000000000011,769 7002250800000000000250.8 69997180000000000000.718 700110800000000000010.8
Chile 7005248411000000000248,411 7005299632000000000299,632 700417222000000000017,222 700186100000000000086.1 69998050000000000000.805 70002700000000000002.7
Colombia 7005328422000000000328,422 7005471964000000000471,964 700410249000000000010,249 700156500000000000056.5 69997100000000000000.710 700115800000000000015.8
Ecuador 700466381000000000066,381 7005127426000000000127,426 70038492000000000008,492 700122300000000000022.3 69997200000000000000.720 700110600000000000010.6
Falkland Islands (U.K) 7002165000000000000165 7002165000000000000165 700455400000000000055,400 69991000000000000000.1
French Guiana (France) 70034456000000000004,456 70034456000000000004,456 700419728000000000019,728 70001300000000000001.3
Guyana 70032480000000000002,480 70035783000000000005,783 70037465000000000007,465 69999000000000000000.9 69996330000000000000.633 700118000000000000018.0
Paraguay 700421236000000000021,236 700435346000000000035,346 70035413000000000005,413 70009800000000000009.8 69996650000000000000.665 700113200000000000013.2
Peru 7005173502000000000173,502 7005301967000000000301,967 700410062000000000010,062 700146300000000000046.3 69997250000000000000.725 700112700000000000012.7
Suriname 70033790000000000003,790 70035060000000000005,060 70039475000000000009,475 70001600000000000001.6 69996800000000000000.680 700127200000000000027.2
Uruguay 700446872000000000046,872 700450908000000000050,908 700415113000000000015,113 70008000000000000008.0 69997830000000000000.783 70002200000000000002.2
Venezuela 7005315841000000000315,841 7005374111000000000374,111 700412568000000000012,568 700192600000000000092.6 69997350000000000000.735 700112900000000000012.9
Total 70064176712000000004,176,712 70064738384000000004,738,384 700411962000000000011,962 7002669100000000000669.1 69997290000000000000.729 700111300000000000011.3

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