Latin America’s historical economic ranking; when Uruguay surpassed Argentina

RIO DE JANEIRO, BRAZIL – When compared in terms of purchasing power parity (PPP), the size of Uruguay’s economy has dropped 4 places in the Latin American countries ranking since 1980. Back then, the country ranked 10th, compared to 14th today. The last time Uruguay ranked 10th was in 2009.

On the other hand, Brazil, Mexico and Argentina remained – in that order – in the top 3 positions throughout the period. The most significant changes involved Venezuela (which dropped from 4th to 9th place) and Panama (which moved up 5 positions, from 15th to 10th), according to International Monetary Fund (IMF) data.

However, the news is not all bad for Uruguay. GDP, which reflects variations in the total production of countries, shows changes in the economic level of the population, but it also fluctuates when the size of the population itself changes.

Intuitively, we tend to say that Switzerland is a wealthier country than India, yet the latter’s GDP is much higher: although the purchasing power of the average Swiss is higher, Switzerland’s population is 8.6 million, while India’s is over 1.38 billion.

The same is true of Uruguay, whose total population and population growth are well below the regional average. Therefore, the ranking serves to observe the “weight” of each country in the continent’s economy, but, in order to measure wealth per inhabitant, it is best to look at per capita GDP.

Uruguay climbed 2 places on this list in the last four decades and reached the top 3 with a GDP of US$23,869. It displaced Brazil, Argentina, Mexico and Venezuela and was only surpassed by Chile (US$26,513) and Panama (US$30,889).

The most drastic change occurred in Venezuela: while its inhabitants were the wealthiest on the continent until 1998, they are now the poorest of all, with a per capita GDP of US$5,162. Its per capita GDP dropped below that of many countries with historically low levels, such as Nigeria, Kenya or Pakistan.

The largest upward shifts came from Panama and Chile, which moved up from 8th to 1st place and from 9th to 2nd place, respectively.