Peru, Colombia & Chile to outshine Brazil on growth this year

The economies of Peru, Colombia and Chile grew more than twice as fast as Brazil last year and are expected to outpace it again in 2012, according to an international report.
The report prepared by Reuters notes that swift growth by these three Andean countries has put renewed focus on regional heavyweight Brazil, whose relatively closed, high-tax economy is 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 adds.

Officials in the Andean countries say they have benefited from low public debt loads, fiscal surpluses that allow them to invest heavily, and an aggressive pursuit of free-trade deals with big countries that have 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 per cent this year. Peru expects to grow up to six per cent 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.’