The economies of Peru, Colombia and Chile grew more than twice as fast as Brazil last year and are expected to outpace it again this year, according to an international report.
The report prepared by Reuters noted that swift growth by these three Andean countries had placed renewed focus on regional heavyweight Brazil, whose relatively closed, high-tax economy was now sputtering below its potential.
Brazil has also lagged its peers in the BRIC club of emerging market heavyweights that includes China, India and Russia, it added.
Officials in the Andean countries said they had benefited from low public debt loads, fiscal surpluses that allowed them to invest heavily, and an aggressive pursuit of free-trade deals with big countries that made their economies among the most open in the world.
In Brazil, politics have at times stymied ambitious fiscal reforms to eliminate the deficit in a country with powerful public sector unions.
Most economists now say Brazil will grow only around 3.3 percent this year.
Peru expects to grow up to six percent and Colombia is so confident of its expansion that the central bank has been boldly raising interest rates.
“In open economies like Peru, there are fewer market distortions, unlike economies which tend to close themselves and create new artificial barriers,” Peruvian Finance Minister Luis Miguel Castilla said in Montevideo.
“That also means the capacity of companies in open economies to adapt in a context of international competition is much greater,” he said”.
Castilla said the risk for small countries that relied on commodities exports was that they could suffer shocks when prices fall, but that they could also recover quickly.