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Latin America Business: Best in 2024
The best news in Latin America business in 2024.
BY LATINVEX EDITORS
The best events in Latin American business this year, according to Latinvex editors.
#1 ARGENTINA PROGRESS
Despite all the noise around Javier Milei – much of it unwelcome – he has managed to deliver real economic results a year after assuming Argentina’s presidency.
Inflation –long a curse for the South American country – has come down significantly. The monthly inflation rate slowed to 2.4% in November, the lowest in over four years, according to data from the official INDEC statistics agency quoted by Reuters.
Annualized 12-month inflation slowed to 166% from 193% and is expected to end 2024 closer to 100%. The International Monetary Fund predicts inflation will fall to 62% next year.
Milei also managed to get rid of Argentina’s fiscal deficit for the first time in 123 years.
Those two developments are the result of aggressive cost-cutting, ending the tradition of Peronist governments to print money for expansive fiscal policies.
Meanwhile, a new Promotional Regime for Large Investment (RIGI for its Spanish acronym) aims to attract $50 billion in foreign investments, Bloomberg reports.
RIGI aims to provide certainty and legal stability to specific long-term investments in Argentina, by offering tax, customs, and currency exchange incentives for 30 years and applies to several industries, including forestry, tourism, infrastructure, mining, technology, steel, energy, and oil and gas, according to an overview from PwC.
Among the first to come in: UK-based Rio Tinto Group plans to invest $2.5 billion in a new lithium mine.
“This is a poster child for what should go into RIGI,” Rio Chief Executive Officer Jakob Stausholm, told Bloomberg. The investor package “doesn’t give you guarantees, but it provides much more protection. It’s very intelligent that Argentina has implemented this.”
The economy is expected to grow 4.9% next year after a 3.5% decline this year, the IMF estimates.
However, there are still two major challenges facing business. An overvalued peso and continued foreign trade restrictions.
“The still considerable foreign trade restrictions make the international exchange of goods and services more difficult and are also proving to be a barrier for foreign investors,” Karl-Heinz Paqué and Hans-Dieter Holtzmann, from German think thank Friedrich Naumann Foundation for Freedom, point out in an extensive analysis of Milei’s first year.
Milei has promised to lift capital and currency controls next year while his administration intends to negotiate a free trade agreement with the US once Donald Trump takes office, Bloomberg reports. But it is unclear if Trump would agree to any free trade deal, as he generally favors protectionist trade policies.
#2 BRAZIL CENTRAL BANK EXCELLENCE
He has had to face a barrage of insulting personal attacks from Brazil’s leftist president Luiz Inacio Lula da Silva, but in the end Central Bank president Roberto Campos Neto can be proud of his efforts to keep inflation in Latin America’s largest economy as low as possible despite Lula’s expansionary fiscal policies.
Campos Neto also spearheaded a hugely successful online payment system Pix, which revolutionized Brazil’s banking system by extending services to the poor and now boasts more than 170 million users since its launch in November 2020.
Brazil Central Bank president Roberto Campos Neto had to withstand constant personal insults from Brazil’s leftist president Luiz Inacio Lula da Silva, but garnered widespread praise for his efforts at fighting inflation and launching the Pix online payment system. (Photo: Pedro França/Agência Senado)
Pix now surpasses credit and debit cards as the preferred method of payment in Brazil, sparking interest across Latin America, Europe and Africa, where authorities are trying to understand the key to the platform’s popularity, Bloomberg reports.
On November 29, it beat all previous records and handled 239.9 million daily transactions worth 130 billion reais (US$21.7 billion), the Central Bank announced at the start of this month. (On December 6, it set a new record in transactions, hitting more than 250 million).
While inflation is again under pressure as Campos Neto leaves after nearly six years, there is no doubt it would have been much worse without his steady hand.
Brazil’s last leftist government – led by Lula protégé Dilma Rousseff – also created constant pressure on prices, but then-Central Bank president Alexandre Tombini was less successful in fighting inflation.
When he first became president in Brazil, in 2003, Lula had appointed well-respected banker Henrique Meirelles as Central Bank president – and gave him de facto autonomy, a key factor behind investor confidence in the country during Lula’s two first terms.
However, Lula 3 clearly is much different from Lula 1 and 2, choosing to constantly attack investors when the real weakens or Campos Neto for increasing rates rather than cutting them. (See Latin America Business: Worst in 2024).
Campos Neto – who was named Central Banker of the Year by The Banker (a Financial Times publication) in 2021, and Central Banker of the Year by LatinFinance in 2022, 2023 and 2024 – reportedly is considering moving to Miami to start a fintech firm after his current jobs ends this month.
Whatever his plans are, Campos Neto deserves much praise for his work at Latin America’s top central bank.
#3 DOMINICAN RE-ELECTION, CONTINUED BOOM
In a region dominated by leftist, investor-hostile leaders, the Dominican Republic continues to stand out. The seventh-largest economy in Latin America also remains the fastest-growing in the area.
Much of the credit goes to Luis Abinader, who was re-elected to a second four-year term in May. He has received high marks for his business and economic policies, which include cutting red tape and corruption and boosting tourism. Abinader’s tax reform proposal in September was widely criticized, but Abinader confirmed his pragmatic streak by pulling it back after the backlash.
The Dominican economy is expected to grow by 5.1% this year, the International Monetary Fund predicts. That will be the highest in all of Latin America, according to a Latinvex analysis. Just as important: The Dominican Republic is expected to lead Latin American GDP growth during the five-year period 2024-2028, our analysis shows.
Meanwhile, tourism is expected to set yet another record this year. On December 2, the country registered 10 million tourist arrivals, and authorities expect the rest of the high-season month to garner nearly one million additional arrivals so the Dominican Republic can reach the yearly target of 11 million.
Last year, an all-time record of 10.3 million visitors, a 43.9% jump from 2022, while receipts from tourism reached $9.8 billion, an increase of 16.1% from 2022.
Local experts have high hopes for Abinader’s second term (which started in August 2024) producing further reforms aimed at making the country even more attractive to business.
Presidents Irfaan Ali of Guyana and Luis Abinader of the Dominican Republic. The two lead the world’s and Latin America’s highest growth economies, respectively. (Photo: Dominican President’s Office)
#4 GUYANA BOOM
Guyana is once again set to post the world’s largest economic growth this year, according to estimates from the International Monetary Fund. The hot oil economy will likely expand by 43.8% this year, compared with 33% last year (also world’s best).
President Irfaan Ali forecast that Guyana’s oil sector is projected to grow by 56.4% this year, Bloomberg reports.
A 2015 oil discovery by Exxon (the world’s biggest oil discovery in a generation) has transformed Guyana from one of the lowest performing in the region to the fastest growing and the Caribbean nation is projected to pump more crude per person than Saudi Arabia or Kuwait by 2027 and is on track to overtake Venezuela as South America’s second-largest oil producer, after Brazil, Bloomberg says.
In October, Ali announced several perks ahead of national elections next year, including free college tuition and a one-time cash payment of nearly $1,000 for every household in the oil-rich South American country, AP reports.
#5 SANTOS PORT TERMINAL DEAL
French shipping giant CMA CGM plans to acquire port terminal operator Santos Brasil in a deal that could reach $2 billion and give it control of South America’s largest container terminal, Reuters reported in September.
The move is expected to reduce waiting times for vessels at Santos port, which can stretch to 10 days.
Santos Brasil runs the Tecon Santos terminal, Brazil’s and South America’s biggest, with capacity to handle around 2.5 million containers per year at the Santos port in Sao Paulo state.
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LATIN AMERICA BUSINESS: YEAR IN REVIEW
Latin America Business: Best in 2024
Latin America Business: Worst in 2024
