07 November 2011 16:22 [Source: ICIS news]
BUENOS AIRES (ICIS)--The gross domestic product (GDP) in Latin America doubled in the last five years and the region now accounts for 8% of the world's economy, said Pedro Wongtschowski, the president of the Latin American Petrochemical Association (APLA).
Wongtschowski is also the president of Brazilian producer Ultrapar. He was speaking to delegates during the 31st APLA annual meeting in Buenos Aires.
Looking at each country, Wongtschowski said Peru, Argentina and Colombia were growing more than average, while Mexico was lagging its partners in the region.
The population in Latin America is nearly twice that of the US, but the US economy is nearly three times larger than the region's GDP.
Latin America has a long way to go, Wongtschowski said.
He also compared the region with China, saying Latin America and China have economies of about the same size. However, the per-capita income in Latin America is ahead of the more populous China.
Wongtschowski showcased Brazil as an example of the economic potential for the region, saying that 45m Brazilians moved into the consumer class in recent years, while 39m people moved up from poverty to the middle class.
Brazil’s population also rose by 10m people in the last five years to 192m people, he said. However, he also pointed to the need for increased petrochemical capacity in Latin America.
Fast-growing markets such as Brazil are demanding more chemical products, but supply is growing at a slower pace, forcing the region to rely increasingly on imports.
This has dramatically widened the trade deficit in the Latin America, Wongtschowski said, citing Mexico and Brazil as the top importers.
Latin America needs to invest in new capacity to meet local demand, he told delegates, warning that the question is not whether demand will grow but rather how the region will deal with it.
Latin America will need to increase production or it will have to make do with increased imports, Wongtschowski said.
The 2011 APLA conference ends on Tuesday.
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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