Latin American Economic Outlook 2023

Reader’s guide

The statistical tables follow key areas identified in the Latin American Economic Outlook (LEO): 1) socio-economic dimension; 2) productivity and innovation; 3) investment and production transformation; 4) citizens’ perceptions and institutions; and 5) fiscal position.

Latin America and the Caribbean (LAC) average is a simple average of the largest set of LAC countries for which data are available.

Organisation for Economic Co-operation and Development (OECD) average is a simple average of the largest set of all OECD member countries for which data were available as of July 2023.

To ensure comparability between years, countries for which data are not available for both years of comparison have been excluded from the averages. Exceptions to this are mentioned in the notes.

Applying the same criteria as in previous LEO editions, data selection prioritises comparability across LAC countries and shows the latest comparable data available at the report’s publication date.

Social dimension

Extreme poverty: 1 refers to the share (%) of the population whose average per-capita income is below the extreme poverty line, as specified by the United Nations Economic Commission for Latin America and the Caribbean. Method of computation: “n” is defined as the total number of persons and “i” is the number of people whose per-capita income is below the extreme poverty line; the percentage of people living in extreme poverty is expressed as I=(i/n)x100 (known as “headcount index”). The average per-capita income (yPC) is calculated by dividing the total income of each household by the number of people forming it. Data from ECLAC (2023_[1]), Social Panorama of Latin America and the Caribbean, https://repositorio.cepal.org/server/api/core/bitstreams/a4d96610-6048-4044-bf89-2eb3c31fc369/content.

Poverty:¹ refers to the share (%) of the population whose average per-capita income is below the poverty line, as specified by the United Nations Economic Commission for Latin America and the Caribbean. Method of computation: “n” is the total number of people and “p” is the number of people whose per-capita income is below the poverty line; the percentage of people living in poverty is expressed as P=(p/n)x100. This indicator includes people under the extreme poverty line, by definition. The average per-capita income (yPC) is calculated by dividing the total income of each household by the number of people forming it. Data from ECLAC (2023_[1]), Social Panorama of Latin America and the Caribbean, https://repositorio.cepal.org/server/api/core/bitstreams/a4d96610-6048-4044-bf89-2eb3c31fc369/content.

Gini index: 2 measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A Gini index of zero represents perfect equality; an index of 100 represents perfect inequality. Data from (World Bank, 2023_[2]), World Bank Open Data, https://data.worldbank.org/indicator/SI.POV.GINI.

Share of internet users: measures people with access to the internet from any location in the last three months as a percentage of the total population. It includes access via a computer, mobile phone, personal digital assistant, games machine, digital TV, etc. Data from (International Telecommunication Union, 2023_[3]), Global ICT Statistics, www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

Share of total population in informal households overall and by quintile: 3 provides the distribution of the total population living in informal households overall and by quintile. An informal household has all its workers in informal work. Quintiles are based on monthly total household consumption or income. Data from (OECD, 2023_[4]), Key Indicators of Informality based on Individuals and their Households (KIIbIH) database, www.oecd.org/dev/key-indicators-informality-individuals-household-kiibih.htm.

SIGI index: measures discrimination against women in social institutions (e.g. formal and informal laws, social norms, and practices). Lower values indicate lower levels of discrimination in social institutions: the SIGI ranges from 0% for no discrimination to 100% for very high discrimination. Data from (OECD, 2023_[5]), Social Institutions and Gender Index (SIGI), https://stats.oecd.org/Index.aspx?DataSetCode=SIGI2019.

PISA score in science: 4 indicates the mean score in science performance as measured by the Programme for International Student Assessment (PISA) for each country. Scientific performance measures the scientific literacy of a 15-year-old in the use of scientific knowledge to identify questions, acquire new knowledge, explain scientific phenomena and draw evidence-based conclusions about science-related issues. Data from (OECD, 2023_[6]), Science performance (PISA) indicator, https://data.oecd.org/pisa/science-performance-pisa.htm#indicator-chart.

Productivity and innovation

Labour productivity: estimation that measures output per employed person as a percentage of United States output per employed person (in 2022 international USD, converted using purchasing power parities). Data from (The Conference Board, 2023_[7]), Total Economy Database, www.conference-board.org/data/economydatabase/totaleconomy-database-productivity.

High-technology exports: 5 measures exports of products with high research and development (R&D) intensity as a percentage of total manufactured exports. Data from (World Bank, 2023_[2]), World Bank Open Data, https://data.worldbank.org/indicator/TX.VAL.TECH.MF.ZS.

Research and development expenditure: 6 measures capital and current expenditures as a percentage of GDP in four main sectors: business enterprise, government, higher education and private non-profit. R&D covers basic research, applied research and experimental development. Data from (World Bank, 2023_[2]), World Bank Open Data, https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS

Investment and production transformation

Total investment: 7 measures the gross fixed capital formation (GFCF) as a percentage of GDP. GFCF includes land improvements (fences, ditches, drains, etc.); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like (including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings). According to the 1993 SNA, net acquisitions of valuables are also considered capital formation. Data from (World Bank, 2023_[2]), World Bank Open Data, https://data.worldbank.org/indicator/NE.GDI.FTOT.ZS.

Foreign direct investment (FDI): 8 measures the net inflows of investment to acquire a lasting management interest (10% or more of voting stock) in an enterprise operating in an economy other than that of the investor as a percentage of GDP. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows net inflows (new investment inflows less disinvestment) in the reporting economy from foreign investors and is divided by GDP. Data from (World Bank, 2023_[2]), World Bank Open Data, https://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS.

Private investment: measures private GFCF as a percentage of GDP. Private GFCF was derived as the residual of total GFCF and general government GFCF. Data from (International Monetary Fund, 2023_[8]), IMF Data, https://data.imf.org/?sk=388dfa60-1d26-4ade-b505-a05a558d9a42.

Public investment in economic infrastructure: 9 measures resources for investment in economic infrastructure: water and sanitation, flood defences, energy, irrigation, telecommunications, and transport. It considers investment by the public sector, including both non-financial public enterprises and general government, the latter of which may comprise three or more levels of government (central; state, provincial or regional; and local). Data from (Infralatam, 2023_[9]), Data on Public Investment in Economic Infrastructure in LAC, http://infralatam.info/.

Citizens’ perceptions and institutions

Share (%) of population who perceive FDI as beneficial: percentage of respondents answering that “foreign investment is beneficial” to the question: Do you consider foreign investment to be beneficial or detrimental to the economic development of the country or do you not know enough to give an opinion? Data from (Latinobarómetro, 2023_[10]), Opinión Pública Latinoamericana, www.latinobarometro.org/latOnline.jsp.

Share (%) of population who consider that, in general, domestic products are of lower quality than imported ones: percentage of respondents who agree or strongly agree with the following statement: In general, domestic products are of lower quality than imported products. Data from (Latinobarómetro, 2023_[10]), Opinión Pública Latinoamericana, www.latinobarometro.org/latOnline.jsp.

Corruption Perception Index: measures citizens’ perceptions of the levels of local corruption in their country, where 0 is completely corrupt and 100 is totally clean. Data from (Transparency International, 2023_[11]), Corruption Perception Index, www.transparency.org/en/cpi/2022.

Security Risks Indicator: considers the security threats to a state, such as bombings, attacks and battle-related deaths, rebel movements, mutinies, coups, or terrorism. The Security Risks Index also considers serious criminal factors, such as organised crime and homicides, and the perceived trust of citizens in domestic security. 0 means low security risks and 10 means high security risks. Data from (The Fund for Peace, 2023_[12]), Fragile States Index, https://fragilestatesindex.org/global-data/.

Science and technology: average reaction to the statement “Because of science and technology, there will be more opportunities for the next generations,” where 1 is completely disagree and 10 is completely agree. Data from (World Values Survey, 2023_[13]), Online Data Analysis, www.worldvaluessurvey.org/WVSOnline.jsp.

Education: share (%) of population who worry (very much or a great deal) about not being able to provide a good education for their children. Data from (World Values Survey, 2023_[13]), Online Data Analysis, www.worldvaluessurvey.org/WVSOnline.jsp.

Fiscal position

Total tax revenues: 10 measures total tax revenues as a percentage of GDP. Data from (OECD, 2022_[14]), Revenue Statistics in Latin America and the Caribbean 2022, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL.

Environmentally related tax revenue: 11 measures the revenues from environmentally related taxes as a percentage of GDP. It includes taxes on greenhouse gas (GHG) emissions, fuel taxes, taxes on road use, forestry taxes and revenue from auctioned permits of emission trading systems for GHGs. Data from (OECD, 2023_[15]), Environmentally related tax revenue, https://stats.oecd.org/Index.aspx?DataSetCode=ERTR.

Share of VAT (value added tax):¹⁰ measures VAT as a percentage of GDP. Data from (OECD, 2022_[14]), Revenue Statistics in Latin America and the Caribbean 2022, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL.

Share of PIT (personal income tax):¹⁰ measures taxes on the income, profits and capital gains of individuals as a percentage of GDP. Data from (OECD, 2022_[14]), Revenue Statistics in Latin America and the Caribbean 2022, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL.

Share of CIT (corporate income tax):¹⁰ measures taxes on the income, profits and capital gains of corporations as a percentage of GDP. Data from (OECD, 2022_[14]), Revenue Statistics in Latin America and the Caribbean 2022, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL.

Perception of tax evasion: measures the share of the population, as a percentage of the adult population, that claims to have heard of people who paid less taxes than they should have. Data from (Latinobarómetro, 2023_[10]), Opinión Pública Latinoamericana, www.latinobarometro.org/latOnline.jsp.

Social expenditure: 12 measures public social spending as a percentage of GDP. The main social policy areas are: old age, survivors, incapacity-related benefits, health, family, active labour market programmes, unemployment, housing, and other social policy areas. For OECD countries, data refer to Social expenditure from (OECD, 2022_[14]), Revenue Statistics in Latin America and the Caribbean 2022 OECD Data Explorer • Social expenditure aggregates. For LAC countries, data refer to Social public expenditure from (ECLAC, 2023_[1]), CEPALSTAT, https://statistics.cepal.org/portal/cepalstat/dashboard.

Debt service: measures debt service as a percentage of tax revenue. Debt service is calculated as general government primary lending/borrowing minus general government net lending/borrowing. Authors’ calculations are based on data from (International Monetary Fund, 2023_[16]), World Economic Outlook Database, www.imf.org/en/Publications/WEO/weo-database/2023/April and (OECD, 2022_[14]), Revenue Statistics in Latin America and the Caribbean 2022, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL.

References

ECLAC (2023), Social Panorama of Latin America and the Caribbean 2023: Labour inclusion as a key axis of inclusive social development, United Nations Economic Commission for Latin America and the Caribbean, Santiago, https://repositorio.cepal.org/server/api/core/bitstreams/a4d96610-6048-4044-bf89-2eb3c31fc369/content.

Infralatam (2023), Data on Public Investment in Economic Infrastructure in Latin America and the Caribbean, http://infralatam.info/.

International Monetary Fund (2023), IMF Data: Access to Macroeconomic & Financial data, https://data.imf.org/?sk=388dfa60-1d26-4ade-b505-a05a558d9a42.

International Monetary Fund (2023), World Economic Outlook Database, https://www.imf.org/en/Publications/WEO/weo-database/2023/April.

International Telecommunication Union (2023), Statistics, International Telecommunication Union, Geneva, https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

Latinobarómetro (2023), Latinobarómetro: Opinión Pública Latinoamericana, https://www.latinobarometro.org/latOnline.jsp.

OECD (2023), Key Indicators of Informality based on Individuals and their Household (KIIbIH), https://www.oecd.org/dev/key-indicators-informality-individuals-household-kiibih.htm.

OECD (2023), OECD.Stat, https://stats.oecd.org/Index.aspx?DataSetCode=ERTR.

OECD (2023), Science performance (PISA), https://doi.org/10.1787/91952204-en (accessed on 8 September 2023).

OECD (2023), Social Institutions and Gender Index, https://stats.oecd.org/Index.aspx?DataSetCode=SIGI2023.

OECD (2022), OECD.Stat: Revenue Statistics in Latin America and the Caribbean 2022, https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL.

The Conference Board (2023), The Conference Board Total Economy Database™, April 2023, http://www.conference-board.org/data/economydatabase/total-economy-database-productivity.

The Fund for Peace (2023), Fragile States Index, https://fragilestatesindex.org/global-data/.

Transparency International (2023), Corruption Perception Index, http://www.transparency.org/en/cpi/2022.

World Bank (2023), World Bank Open Data, https://data.worldbank.org/.

World Values Survey (2023), World Values Survey: Online Data Analysis, http://www.worldvaluessurvey.org/WVSOnline.jsp.