In its report “Seizing the Moment: Latin America’s Productivity Opportunity,” McKinsey starts from a familiar diagnosis but puts hard numbers behind it: Latin America grows slowly because it produces too little per worker. Over the past 25 years, the region expanded just 2.3% annually, below the global average of 3%. Worse, 65% of that growth came from labor-force expansion — a demographic bonus that is now fading.
The gap is larger than it appears. Latin American productivity fell from 35% to 16% of US levels between 2011–13 and 2021–23. In simple terms, it now takes six Latin American workers to generate the same output as one American worker — and roughly ten in sectors such as retail, tourism and agriculture.
The opportunity, however, is not about another slogan around “potential.” McKinsey estimates that three major themes — industrial revitalization, digitalization and natural resources — could add between $1.1 trillion and $2.3 trillion to regional GDP by 2040. Seven sectors sit at the center of that bet: advanced manufacturing, low-carbon fuels and industrial products, digital services, data centers, agri-food, oil and gas, and critical minerals. Together, they could generate as much as $1.2 trillion in additional annual revenue, but would require between $1.7 trillion and $2.8 trillion in cumulative investment.
How does the region get there? The report itself outlines the path: invest more and invest better, open new trade corridors, deepen regional integration, simplify regulation and upgrade workforce skills. Today, only 15% of Latin American exports stay within the region, compared with roughly 60% in the European Union. Without scale, regional supply chains and shared infrastructure, Latin America will continue selling natural advantage as commodities instead of transforming it into productivity.
Brazil sits at the center of this equation. The country has agriculture, oil, iron ore, renewable energy, biofuels, IT services and data centers. But the test is not about listing advantages. It is about converting them into higher-value products, processing capacity, technology, logistics and human capital. Latin America already knows where the opportunity is. What it still needs to prove is whether it can actually capture it.
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