Monday, March 1, 2021

Lack of competitiveness affects Colombia’s economic climate, according to the FGV study


The report showed that Colombia gave way to Peru as the best country in Latin America to do business. Nevertheless, the national indicator remained stable 6.7 points.

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According to a study released today by the private economic research centre Fundación Getulio Vargas (FGV)) Economic Climate Index (ECI) the  Clima Económico (ICE) de Chile was one of the most improved in Latin America during April and managed to move from sixth to fifth in the region sharing the post with Brazil.

In the country, the indicator rose 4.9 Chile from January to 6.2 points last month.

Other nations where the index was also improved in Peru, whose index rose from 6.4 to 7.2 points, leading the ranking, Ecuador (6.0 to 6.7), Bolivia (from 4.3 to 5.0 ) and Mexico (4.1 to 4.8).

The main problem for Chile and Peru is the lack of skilled labour, for Colombia, lack of competitiveness, and Bolivia, the lack of confidence in government policies.

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Peru (7.2 points) replaced Colombia (6.7 points) as the country with best business environment in Latin America, while Paraguay (3.0) replaced Mexico (4.8) as the worst.

The indicator remained stable in Brazil (6.2 points) and Colombia (6.7), and Uruguay rose slightly, from 6.3 to 6.4 points.

Only three of the eleven analyzed showed a worsening climate for business in January-April: ICE fell 4.7 points to 3.4 in Argentina, 4.2 to 3.0 points and 4.5 in Paraguay to 3.4 points in Venezuela.

Latin America improved
ICE Latin America rose 5.2 points in April, its highest since the 5.8 points in July 2011.

ICE is comprised of the Índice de Situación Actual (ISA) – Present Situation Index – a situational assessment, and the Expectations Index (EI), the projection for the next six months.

According to the study, which surveyed 149 specialists from 18 countries, while the ISA fell from 5.8 points in January to 5.6 in April, IE rose from 4.2 to 4.8 points over the same period.

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The indicator of the business climate in Latin America has been in recovery since October 2011 when it registered its lowest level in two years (4.4 points), due to the international economic crisis, according to the quarterly assessment jointly developed by the FGV and the University of Munich (Germany).

Although the index rose in April compared to 5.0 points recorded in January this year, has not yet recovered measured 5.6 points in the fourth month of 2011.

According to the FGV, although analysts expect a recovery in the economy of the region in the next few months, Latin America is still in phase “decline of the economic cycle.”

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