Not only has the region learned lessons from the 2008 crisis, but many countries have built up their international reserves and continued economic reforms.
With a few exceptions, one popular analysis of the Latin American economy says that countries linked to the faltering U.S. economy, such as Mexico and those in Central America and the Caribbean, have shown slower growth.
Commodity-rich countries whose trade is tied to Asia, especially to China, have outpaced their northern neighbors.
But with jitters about the eurozone crisis continuing and the possibility of a slowdown in the Chinese economy, questions loom for Latin America and the Caribbean.
Most of the region's economies will post respectable economic gains this year, but 2012 could be challenging if global demand slackens and commodity prices fall.
"The European crisis will end badly, and there will be some impact, but not as much" as in the old days when a global slowdown would push the region into a downward spiral, said Victor Manuel Rocha, former U.S. ambassador to Bolivia and now a senior international business adviser in the Miami office of Foley & Lardner LLP.
"What happens in China is more important to Brazil than what happens in Europe," Rocha said.
Latin America also is better prepared to handle an economic storm than it was in 2008. Not only has the region learned lessons from that crisis, but many countries have built up their international reserves and continued economic reforms.
That's especially true for countries blessed with iron ore, copper, oil and vast expanses of land for production of the soybeans, wheat and cattle that China buys.
"This time around, China itself looks more likely to suffer a significant slowdown," with its own debt and manufacturing bottlenecks as contributing factors, said Lord Mark Malloch-Brown, former British minister of state and chairman of the global affairs practice at FTI Consulting.
He said economic problems in the United States and Europe may be as profound as 2008.
"It's a much more tricky and difficult global situation," he said.
But offsetting that, Malloch-Brown said, is the "tremendous addition of domestic demand" in Latin America.
With more people entering the middle class and increasing consumption, Latin American economies have more of a cushion to sustain themselves during a rough patch.
Indeed, purveyors of luxury goods have found a favorable market in recent years.
Porsche Latin America, which has 42 dealerships that cover 26 countries, is expanding and has seen substantial growth this year in its three biggest markets: Brazil, Mexico and Chile.
Porsche expects to add four or five dealerships in the region in 2012, said Matthias Brueck, chief executive of the regional office. It also will enter the Honduran market this year and Bolivia next year.
"Our (luxury) segment has grown faster than the regular car market (for the) year to date," he said.
Far and away Porsche's best seller in Latin America is the Cayenne SUV — despite a staggering price of $389,248 for the Turbo model and $182,872 for the less expensive V-6 in Brazil. That includes a recent 30 percent increase in import duties that Brazil imposes on the vehicles.
Still, "there are an increasing number of people who can, and want to, afford luxury brands," Brueck said. "Brazilians, especially, are very fond of luxury brands."
Year to date, he said, sales are up 30 percent in Porsche's Latin American/Caribbean region, compared with a 28 percent increase from January to September in the U.S. market.
"It will be a record year for us in Latin America," Brueck said.
But that doesn't mean there aren't problems in some countries, from escalating inflation to investor jitters to rampant violence by drug cartels in the case of Mexico.
Malloch-Brown said it is possible that trade and investment will pick up in Mexico in 2012 — "if there is some quieting of the level of insecurity and violence."
Argentina seems to be a study in contradictions. Despite economic growth that is expected to be among the highest in Latin America this year and President Cristina Fernandez's overwhelming victory in last month's election, analysts aren't particularly sanguine about the Argentine economy.
Although Fernandez recently raised the minimum wage by 25 percent and increased welfare payouts, Argentina hasn't made payments on its foreign debt since it defaulted in 2001.
It also faces mounting inflation, steady capital flight and a widening budget deficit. "I think we're seeing the beginning of a major economic crisis in Argentina," Rocha said.
The United Nations' Economic Commission for Latin America and the Caribbean is now predicting economic growth of 4.4 percent for the region this year, down from an earlier estimate of 4.7 percent.
It predicted in late summer that the value of regional exports would grow by 27 percent. Despite global uncertainty, Rocha said, "Latin America is about to experience the best decade (2010-2019) in 50 years. Why? The game is now in the emerging economies."
chicagotribune.com
With a few exceptions, one popular analysis of the Latin American economy says that countries linked to the faltering U.S. economy, such as Mexico and those in Central America and the Caribbean, have shown slower growth.
Commodity-rich countries whose trade is tied to Asia, especially to China, have outpaced their northern neighbors.
But with jitters about the eurozone crisis continuing and the possibility of a slowdown in the Chinese economy, questions loom for Latin America and the Caribbean.
Most of the region's economies will post respectable economic gains this year, but 2012 could be challenging if global demand slackens and commodity prices fall.
"The European crisis will end badly, and there will be some impact, but not as much" as in the old days when a global slowdown would push the region into a downward spiral, said Victor Manuel Rocha, former U.S. ambassador to Bolivia and now a senior international business adviser in the Miami office of Foley & Lardner LLP.
"What happens in China is more important to Brazil than what happens in Europe," Rocha said.
Latin America also is better prepared to handle an economic storm than it was in 2008. Not only has the region learned lessons from that crisis, but many countries have built up their international reserves and continued economic reforms.
That's especially true for countries blessed with iron ore, copper, oil and vast expanses of land for production of the soybeans, wheat and cattle that China buys.
"This time around, China itself looks more likely to suffer a significant slowdown," with its own debt and manufacturing bottlenecks as contributing factors, said Lord Mark Malloch-Brown, former British minister of state and chairman of the global affairs practice at FTI Consulting.
He said economic problems in the United States and Europe may be as profound as 2008.
"It's a much more tricky and difficult global situation," he said.
But offsetting that, Malloch-Brown said, is the "tremendous addition of domestic demand" in Latin America.
With more people entering the middle class and increasing consumption, Latin American economies have more of a cushion to sustain themselves during a rough patch.
Indeed, purveyors of luxury goods have found a favorable market in recent years.
Porsche Latin America, which has 42 dealerships that cover 26 countries, is expanding and has seen substantial growth this year in its three biggest markets: Brazil, Mexico and Chile.
Porsche expects to add four or five dealerships in the region in 2012, said Matthias Brueck, chief executive of the regional office. It also will enter the Honduran market this year and Bolivia next year.
"Our (luxury) segment has grown faster than the regular car market (for the) year to date," he said.
Far and away Porsche's best seller in Latin America is the Cayenne SUV — despite a staggering price of $389,248 for the Turbo model and $182,872 for the less expensive V-6 in Brazil. That includes a recent 30 percent increase in import duties that Brazil imposes on the vehicles.
Still, "there are an increasing number of people who can, and want to, afford luxury brands," Brueck said. "Brazilians, especially, are very fond of luxury brands."
Year to date, he said, sales are up 30 percent in Porsche's Latin American/Caribbean region, compared with a 28 percent increase from January to September in the U.S. market.
"It will be a record year for us in Latin America," Brueck said.
But that doesn't mean there aren't problems in some countries, from escalating inflation to investor jitters to rampant violence by drug cartels in the case of Mexico.
Malloch-Brown said it is possible that trade and investment will pick up in Mexico in 2012 — "if there is some quieting of the level of insecurity and violence."
Argentina seems to be a study in contradictions. Despite economic growth that is expected to be among the highest in Latin America this year and President Cristina Fernandez's overwhelming victory in last month's election, analysts aren't particularly sanguine about the Argentine economy.
Although Fernandez recently raised the minimum wage by 25 percent and increased welfare payouts, Argentina hasn't made payments on its foreign debt since it defaulted in 2001.
It also faces mounting inflation, steady capital flight and a widening budget deficit. "I think we're seeing the beginning of a major economic crisis in Argentina," Rocha said.
The United Nations' Economic Commission for Latin America and the Caribbean is now predicting economic growth of 4.4 percent for the region this year, down from an earlier estimate of 4.7 percent.
It predicted in late summer that the value of regional exports would grow by 27 percent. Despite global uncertainty, Rocha said, "Latin America is about to experience the best decade (2010-2019) in 50 years. Why? The game is now in the emerging economies."
chicagotribune.com
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