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Tuesday, 20 March 2018 15:01

The Demographics of Latin America

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demographicsIn the book “The Rise and Fall of Nations” by Ruchir Sharma from Morgan Stanley, the author presents 10 factors that are critical for a country economic success. His first chapter is on population since demographics plays such a critical role in a nation’s wealth creation.

Countries with a growing talent of workers like India tend to experience much faster growth that countries that their population are shrinking like Japan and Italy. Note also that there is a lag between the change in GDP and population growth since it takes time for a new borne to reach working age.

“Our World in Data” organization provides a wealth of information on Demography. The world population growth peaked in the early 60’s at 2.2% and has dropped to 1.12 in 2015 dropped (even though Sub-Sahara Africa its growing above 3%). The top three economies in Latin America—Brazil, Mexico and Argentina, are growing at a rate of 0.83%, 1.32% and 1% respectively. The current largest economies have a significant lower growth rates: Italy -0.13%, Germany, 0.26%. China, 0.48% and the USA 0.7%. India, does continue a fast growth at 1.16%.

Overall, Latin America has been, after Africa, the region with fastest population growth, and has reached a population of 600 M people. And with a per capita consumer expenditure of $6,600 makes its consumer market today equal to China and 3.2 times India’s.

What would be results of the favorable demographic trends in Latin America? Two are most important:
1.    Brazil and Mexico, the 8th and 16th largest economy in the world today, would become the 5th and 6th by year 2050, ahead of countries like Germany, Japan and the UK.
2.    An economic boost for the next 25 years as its share of people at working age (15-60) increases.

Let’s finalize this blog with Sharma’s book first chapter title: Population Matters

Read 146 times Last modified on Friday, 06 April 2018 10:40

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