One out of every two exporting firms in Latin America and the Caribbean believe that international demand will grow in the next three months, compared to 16 percent in 2020, according to a survey by the Inter-American Development Bank (IDB).
Companies predict foreign demand to increase by 57 percent over the coming year, up from 36 percent in 2020 -- another sign of optimism in the exporting sector a year and a half after the COVID-19 outbreak.
The Survey of Latin American Exporting Firms: Decoding the New DNA of Exporters (available in Spanish) also reveals that 35 percent of companies increased their exports in the first quarter of 2021, compared to 11 percent in 2020. Meanwhile, seven out of ten firms acknowledged that adopting environmentally friendly measures can facilitate their insertion into global value chains.
“Overcoming the crisis and getting growth above pre-pandemic levels is one of the main challenges facing Latin America and the Caribbean. To achieve this, we need to facilitate investment in both regional and global value chains and increase intraregional integration,” said IDB President Mauricio Claver-Carone.
Addressing climate change and strengthening regional value chains are two of the five priorities of Vision 2025, the IDB’s plan to support sustainable recovery and social and economic development in the region.
“It’s encouraging to see that in the second year of the pandemic, companies recovered their export performance and anticipate significant trade improvements in 2022. It’s also worth noting that government assistance to cope with the negative effects of the pandemic has increased, according to the firms,” said Fabrizio Opertti, manager of the IDB’s Integration and Trade Sector.
In its second edition, the survey was conducted by the Integration and Trade Sector’s Institute for the Integration of Latin America and the Caribbean (INTAL) among 405 micro, small, medium, and large enterprises from 18 countries in the region. Other noteworthy findings include:
- Investment. Four out of every five firms will increase or maintain their export-oriented investment levels in the next three years.
- More trade agreements. Approximately seven out of every ten companies said that the region needs to sign more trade agreements, especially with Latin American and Caribbean countries and with the United States.
- Greater state presence. Only four percent of firms reported receiving no public-sector assistance to mitigate the pandemic’s impact on export performance
- Offensive stance to the pandemic. Almost every company (96 percent) took measures to mitigate the adverse effects of the pandemic on their sales abroad, most of which entailed proactive initiatives such as seeking out new markets.
- Widespread use of e-commerce for export in the context of the pandemic. In 2021, 38 percent of the companies are using this sales channel. According to the same survey from the previous year, this is up from approximately 25 percent before the pandemic,
About the IDB
The Inter-American Development Bank’s mission is to improve lives. Founded in 1959, the IDB is one of the leading sources of financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also undertakes cutting-edge research projects and provides consultancy services on policies, technical assistance, and training to public and private clients throughout the region.
The Institute for the Integration of Latin America and the Caribbean (INTAL) is part of the Inter-American Development Bank’s Integration and Trade Sector. It was created in 1965 and seeks to promote regional and international integration for LAC countries by generating qualitative and quantitative information, conducting technical analyses, assisting governments, and developing training programs for public officials and the business community in Latin America and the Caribbean. It also aims to raise awareness about the scope of Latin American integration and the benefits and challenges that this entails.