In a keynote speech during the recent Wharton Latin America Conference 2013, Antonio Quintella, a founding partner of Sao Paulo-based asset management firm Peninsula Investimentos, tackled a broad theme of interest to every attendee: Is the Latin American glass half full or half empty? To answer that complex question, Quintella analyzed economic data about Latin America’s leading economies provided by Credit Suisse, the International Monetary Fund and the World Bank. Quintella, who is also chairman of Credit Suisse Hedging-Griffo, was formerly CEO of Credit Suisse’s Americas region and CEO of the firm’s Brazil operations.
The economic transformation of the region has been rapid, Quintella noted at the outset, producing several economies that are “reasonably resilient, more open and more stable. The growth rates in private consumption are impressive, although the growth in fixed investments has slowed.” To illustrate this point, Quintella presented data about a group of leading countries – Brazil, Mexico, Colombia, Chile and Peru. In that group as a whole, he noted, year-on-year GDP growth increased from only 2.2 % in 1999 to 2003, to 3.4% in 2004 to 2009, to 4.4% in 2010 to 2012.
To illustrate these five countries’ greater openness to trade, he measured the combined value of imports and exports as percentage of national GDP in those countries. That metric grew from 39.3% (from 1999 through 2003) to 41.8% (2004-2009) to 43.1% (2010-2012). To illustrate the increasing economic stability of these countries, Quintella noted that basic interest rates (per annum) declined from 15.3% to 9.9% to 6.7% during the same periods. He added that international reserves as a percentage of external debt — a measure of the countries’ vulnerability to shocks — improved from 28.9% to 56.1% to 77.3% during these periods as well.
Originally Published May 01, 2013 in Knowledge@Wharton.