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These Latin American Countries Rank Highest in the Economic Complexity Index

According to a recent report, certain Latin American countries are making significant strides in terms of economic complexity. This, in turn, is opening up new opportunities for real estate investors.

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Economic complexity is an intriguing metric that goes beyond mere GDP to provide a more nuanced understanding of a nation’s economic health and its future prospects. One of the most referred-to sources for economic complexity data is the Atlas of Economic Complexity, developed by researchers at the Harvard Kennedy School’s Growth Lab. This resource provides a ranking of countries based on their economic complexity, allowing for comparisons at regional and global levels.

In an ever-globalising world, the economic landscape is continuously evolving. While traditionally, large economies like the United States, China, and several European countries have been seen as complex and diverse, Latin America is making significant strides in the Economic Complexity Index (ECI).

For Latin American countries, this parameter is particularly important given the region’s diverse economic landscape, which comprises both emerging markets and developing economies.

In the most recent data from the Economic Complexity Observatory, the top spots are taken by Mexico (1), Brazil (2), Panama (3), and Costa Rica (4). We explore what makes some of these regions so economically robust.

Mexico

Mexico takes the lead among Latin American countries in terms of economic complexity in both the Atlas and more recent data published by Bloomberg. Known for its automotive and aerospace industries, Mexico also boasts a burgeoning technology sector. The presence of several free trade agreements, such as NAFTA (now replaced by the USMCA), has allowed Mexico to export a wide range of products, bolstering its ECI. The country has managed to diversify its economy considerably, providing it with a strong footing for future growth.

Brazil

As the largest economy in Latin America, Brazil is a notable player on the global stage. For years, Brazil was primarily known for its exports of raw materials like coffee and soybeans. However, the Brazilian economy has evolved to include a variety of sectors, such as aerospace and technology. Companies like Embraer have put Brazil on the map for the manufacture of regional jets, contributing to the country’s rising ECI.

Panama

Panama may be best known for its canal, a critical conduit for international maritime trade, but its economy is far more diversified than it appears. As a hub for finance and logistics, Panama City showcases the country’s move into services and high-skilled sectors.

The presence of the Colon Free Zone, the second-largest free trade zone in the world, allows Panama to serve as a vital trading link between North and South America, as well as between the Atlantic and Pacific Oceans. This strategic positioning and diversification have boosted Panama’s economic complexity over the years.

Costa Rica

Costa Rica is another standout nation in Latin America in terms of economic complexity. Traditionally known for its coffee and banana exports, the country has branched out significantly. One of its most notable achievements is its pioneering role in eco-tourism, attracting millions of visitors eager to explore its biodiverse landscapes. In addition to tourism, Costa Rica has made strides in sectors like medical devices and information technology. Companies like Intel have even set up operations in the country, contributing to a more knowledge-intensive economy.

The increasing economic complexity in key Latin American countries bodes well not only for Latin America but also for the global economy at large. As these nations continue to evolve, property and other assets will grow in value, meaning those who invest now can look forward to substantial returns in the future.


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Global Economic Complexity