South America has a diversified developing economy across the fourth-largest continental land-mass in the world. It comprises approximately 434 million people living in the 12 sovereign states and three dependent territories of South America, which encompasses 6 percent of the world's population. In 2025, South America ranks fourth in terms of nominal GDP by continent, behind Europe and after Africa and Oceania.

South America has two major trade blocks: Mercosur and the Andean Community. Brazil is the largest economy in South America in terms of nominal GDP.

History

20th century From the 1930s to the 1980s, countries in South America used import substitution, an economic policy that replaces foreign businesses as well as imports with domestic production. This was a policy made to increase domestic manufacturing. Furthermore, national spending on arms soared during periods of military rule. Increasingly, South American countries began to borrow from foreign private banks and international lending institutions, such as the World Bank and the Inter-American Development Bank, to fund existing programs while also trying to expand their economic productivity through investments. However, this policy created a debt crisis in South America.

The continent has fallen further behind North America over the past two centuries. This can be explained by South America's high concentration on primary commodities as well as the state of the educational system and institutional structure, some of which are still related to its colonial past, others to recent political developments.

From the 1990s on, countries in South America switched over to the free-market economy system. Now, major economic activities include agriculture, industry, forestry, and mining.

21st century In 2016, four countries, which include Brazil, Ecuador, Argentina, and Venezuela, experienced a decline in output. Other countries in the region were observing a slowdown in growth rates.Recent developments World Bank Retrieved 28 July 2023 Brazil saw this decline in output due to increasing unemployment levels, worsening financial conditions, and political issues, which, in turn, led to a decrease in private domestic consumption and investment. Argentina also experienced a recession in private consumption and investment; however, it was because of the removal of public service subsidies due to a short-term rise in inflation. In contrast, Peru differed from other countries in the region, demonstrating an increase in growth rates thanks to copper production.

In 2017, the economy started to recover for the first time since 2014. The main contributor to economic growth is private consumption.Recent developments World Bank Retrieved 28 July 2023 Increased retail trade and industrial production in Brazil have led to an expansion of its economy by 1% in 2017. Higher public investments and private consumption have resulted in the growth of the economy of Argentina compared to its recession in 2016.

In 2017, inflation rates were observed to be on a downward trend in most of the major economies. The reasons are prior exchange rate appreciations and food price deflation. Some countries are even expected to lower their target bands in 2019.

By country Country GDP (nominal) $bn2025 GDP (PPP) $bn2025 GDP per capita $,0002025 Merchandise exports$bn2022 Human Development Index2021 % with less than $2.15 per day2021 Argentina Bolivia Brazil Chile Colombia Ecuador 125 Falkland IslandsFalkland Islands (Islas Malvinas) . The World Factbook. Central Intelligence Agency. French Guiana Guyana 25 Paraguay 45 Peru 303 Suriname 4.5 Uruguay Venezuela 108 Total

Economy of:

Argentina Bolivia Brazil Chile Colombia Ecuador French Guiana Guyana Paraguay Peru Suriname Uruguay Venezuela

Economic sectors

Agriculture

Throughout history, since the colonial period, the export of natural resources has been a key factor for South America's economy. With a land that can be divided into four climatic regions (tropical, temperate, arid and cold), South America is a diverse land rich in natural resources. It has a wide variety of agricultural products, mineral wealth, plentiful freshwater and rich fisheries.

As one of the most important contributors of the world's agricultural market, South America accounts for approximately 10% of the global agricultural product export. The different climatic regions are home for diverse types of crops. In the tropical climatic regions, two of the most important cash crops are coffee and cacao. South America dominates the global market in coffee production, having Brazil as the world's largest exporter of coffee. A report from the Council of Brazilian Coffee Exporters showed that the coffee industry earned US$5.4 billion in 2016, with the exports of different coffee varieties exceeding 34 million 60 kg bags. This accounts to 6.4% of Brazil's total annual agrobusiness exports of US$84.9. The report showed that by December 2016, the Brazilian coffee industry generated US$557 million in revenue by exporting 3.07 million bags of coffee. Additionally, in 2016 soybeans, grown in South America's temperate climates, had an export value of US$19B for Brazil, representing 10.4% of the total exports, and one of US$3.23B for Argentina, representing 5.7% of the country's total exports. Moreover, the soybean meal exportation represent 17.5% of Argentina's total exports, with an export value of $9.96B.

Other exports from the tropical regions, such as the Amazon rainforest (contained within Brazil, Peru, Colombia, Ecuador, Bolivia French Guiana and Suriname), include cashews and Brazil nuts, globally regarded as delicacies, as well as sugar (sugarcane), avocados, bananas, pineapples, oranges, grapefruits, and mangoes. The sugarcane cultivation has been the backbone of the economy since early colonial times, and Ecuador is the world's largest banana exporter (Banana Production in Ecuador)

In the temperate regions, maize (corn) is produced and it is the second most exported product in Argentinas. Additionally in cold climatic regions such as the Andes, there is a high production of crops such as quinoa, increasingly valued internationally, as well as the grazing of llamas, vicuñas and alpacas. These animals are bred for their wool and it is exported globally as a high-quality textile.

The four countries with the strongest agriculture are Brazil, Argentina, Chile and Colombia. Currently: Brazil is the world's largest producer of sugarcane, soy, coffee, orange, guaraná, açaí and Brazil nut; is one of the top 5 producers of maize, papaya, tobacco, pineapple, banana, cotton, beans, coconut, watermelon, lemon and yerba mate; is one of the top 10 world producers of cocoa, cashew, avocado, tangerine, persimmon, mango, guava, rice, oat, sorghum and tomato; and is one of the top 15 world producers of grape, apple, melon, peanut, fig, peach, onion, palm oil and natural rubber; Argentina is the world's largest producer of yerba mate; is one of the 5 largest producers in the world of soy, maize, sunflower seed, lemon and pear, one of the 10 largest producers in the world of barley, grape, artichoke, tobacco and cotton, and one of the 15 largest producers in the world of wheat, oat, chickpea, sugarcane, sorghum and grapefruit; Chile is one of the 5 largest world producers of cherry and cranberry, and one of the 10 largest world producers of grape, apple, kiwi, peach, plum and hazelnut, focusing on exporting high-value fruits; Colombia is one of the 5 largest producers in the world of coffee, avocado and palm oil, and one of the 10 largest producers in the world of sugarcane, banana, pineapple and cocoa; Peru is the world's largest producer of quinoa; is one of the 5 largest producers of avocado, blueberry, artichoke and asparagus; one of the 10 largest producers in the world of coffee and cocoa; one of the 15 largest producers in the world of potato and pineapple, and also has a considerable production of grape, sugarcane, rice, banana, maize and cassava; its agriculture is considerably diversified; Paraguay's agriculture is currently developing, being currently the 6th largest producer of soy in the world and entering the list of the 20 largest producers of maize and sugarcane.

Animal husbandry

Brazil is the world's largest exporter of chicken meat: 3.77 million tons in 2019. The country is the holder of the second largest herd of cattle in the world, 22.2% of the world herd. The country was the second-largest producer of beef in 2019, responsible for 15.4% of global production. It was also the 3rd largest world producer of milk in 2018. This year, the country produced 35.1 billion liters. In 2019, Brazil was the 4th largest pork producer in the world, with almost 4 million tons.

In 2018, Argentina was the 4th largest producer of beef in the world, with a production of 3 million tons (behind only USA, Brazil and China). Uruguay is also a major meat producer. In 2018, it produced 589 thousand tons of beef.

In chicken meat production, Argentina ranks among the 15 largest producers in the world, and Peru and Colombia are among the 20 biggest producers. In beef production, Colombia is one of the 20 largest producers in the world. In honey production, Argentina ranks among the 5 largest producers in the world, and Brazil among the 15 largest. In terms of production of cow's milk, Argentina ranks among the 20 largest producers in the world.

Industry

The World Bank annually lists the top manufacturing countries by total manufacturing value. According to the 2019 list, Brazil has the thirteenth most valuable industry in the world (US$173.6 billion), Venezuela the thirtieth largest (US$58.2 billion, however, it depends on oil to obtain this value), Argentina the 31st largest (US$57.7 billion), Colombia the 46th largest (US$35.4 billion), Peru the 50th largest (US$28.7 billion) and Chile the 51st largest (US$28.3 billion).

80% of the manufacturing of the Latin America region falls on Argentina, Brazil and Mexico.

Brazil has the third-largest manufacturing sector in the Americas. Accounting for 28.5 percent of GDP, Brazil's industries range from automobiles, steel, and petrochemicals to computers, aircraft (Embraer), food, pharmaceutical, footwear, metallurgy and consumer durables. In the food industry, in 2019, Brazil was the second largest exporter of processed foods in the world. In 2016, the country was the 2nd largest producer of pulp in the world and the 8th producer of paper. In the footwear industry, in 2019, Brazil ranked 4th among world producers. In 2019, the country was the 8th producer of vehicles and the 9th producer of steel in the world. In 2018, the chemical industry of Brazil was the 8th in the world. In textile industry, Brazil, although it was among the 5 largest world producers in 2013, is very little integrated in world trade. In the aviation sector, Brazil has Embraer, the third largest aircraft manufacturer in the world, behind Boeing and Airbus.

In 2019, Argentina was the 31st world producer of steel, the 28th producer of vehicles, the 22nd world producer of beer, the 4th world producer of soybean oil and the 3rd world producer of sunflower oil, among other industrial products.

Mining

Mining is one of the most important economic sectors in South America, especially for Chile, Peru and Bolivia, whose economies are highly dependent on this sector. The continent has large productions of gold (mainly in Peru, Brazil and Argentina); silver (mainly in Peru, Chile, Bolivia and Argentina); copper (mainly in Chile, Peru and Brazil); iron ore (Brazil, Peru and Chile); zinc (Peru, Bolivia and Brazil); molybdenum (Chile and Peru); lithium (Chile, Argentina and Brazil); lead (Peru and Bolivia); bauxite (Brazil); tin (Peru, Bolivia and Brazil); manganese (Brazil); antimony (Bolivia and Ecuador); nickel (Brazil); niobium (Brazil); rhenium (Chile); iodine (Chile), among others.