The bulk of the growth in the “Rest of the Americas” (which includes Latin America and Canada) came from the tech-enabled sector (+3.9% in net terms). While the reporting sector may appear to have a higher net growth rate at +18.4%, the truth is that the area where the most dollars were generated was the tech-enabled one. Historically higher inflation rates in this region managed to lower growth substantially and even showed an established sector losing ground after a -5.7% growth rate in net terms.
The present year is expected to continue the trend of stabilisation and show an industry worth over US$ 4.5 billion after a +7.5% net growth. For the most part, however, we will have to wait longer before making assumptions with any sufficient level of confidence that the effects of the pandemic have been absorbed and overcome.
This exemplifies the unfortunate outcome severe shocks have on the different economies of the world. While the most resilient systems tend to react quicker, lose less ground, and recover faster, others appear more vulnerable, for longer. This widens the existing differences across countries in the world, weakening the global equilibrium.
Disparities between countries
No outcome better reflects the disparate recovery from the pandemic than the fact that only six markets managed to present positive net growth during 2021 – of which four were double-digit. And while overall, no country projects negative growth for 2022, only two markets expect a net growth rate of 10% or above: Colombia with 10% and Peru with 16%.
The high inflation rate that seems to have become so usual for some of the Latin American countries continues to inhibit the proper development of the industry. With an inflation rate of almost 10% expected for 2022, Latin America’s growth largely finds itself engulfed by the severe effects of these price adjustments which make it a challenge to generate substantial available capital for reinvestment.