Expectations improve for Latin American and Caribbean exportersFriday, September 24, 2021
WASHINGTON, United States (CMC) — A new survey by the Inter-American Development Bank (IDB) has found that one out of every two exporting firms in Latin America and the Caribbean (LAC) believe that international demand will grow in the next three months, compared to 16 per cent in 2020.
It said that companies predict foreign demand to increase by 57 per cent over the coming year, up from 36 per cent in 2020, another sign of optimism in the exporting sector a year and a half after the coronavirus (COVID-19) outbreak.
The Survey of Latin American Exporting Firms: Decoding the New DNA of Exporters, also reveals that 35 per cent of companies increased their exports in the first quarter of 2021, compared to 11 per cent in 2020.
Meanwhile, seven out of 10 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.
Among the findings of the survey are that four out of every five firms will increase or maintain their export-oriented investment levels in the next three years and that approximately seven out of every 10 companies said that the region needs to sign more trade agreements, especially with Latin American and Caribbean countries and with the United States.
The survey also found that only four per cent of firms reported receiving no public-sector assistance to mitigate the pandemic's impact on export performance and that almost every
company (96 per cent) 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.
Regarding the widespread use of e-commerce for export in the context of the pandemic, the survey noted that this year, 38 per cent of the companies are using this sales channel.
According to the same survey from the previous year, this is up from approximately 25 per cent before the pandemic.