Industry Trend Analysis - Healthcare Providers To Benefit From A Growing Middle Class - MAR 2018


BMI View : Latin America will see stronger economic growth in 2018. Stabilising labour markets and moderating inflation will support consumption, while lower interest rates and a broad shift toward more orthodox economic policies will bolster investment. That said, the region's political environment will remain volatile, suggesting substantial downside risks to economic growth and policy continuity - increasing the risks to regional growth recorded by healthcare providers in the short term. However, the region's traditional commitment to healthcare, increasing public provision of medical services and the expanding middle class means that, over the long term, there will be significant commercial opportunities.

The Latin American healthcare market - worth USD364.5bn (EUR329.4bn) in 2016 - is forecast to expand to USD525.3bn (EUR449.0bn) in 2021, at a compound annual growth rate (CAGR) of 7.9% at constant exchange rate (CER; excluding Venezuela). The region's healthcare market will post a five-year CAGR of 7.6% in USD terms and 6.4% in EUR terms. The Latin America region is made up of the Mercosur, Southern Cone, Andean and Central America sub-regions. The USD185.6bn (EUR167.7bn) Mercosur region will post an 8.3% CAGR at CER through to 2021. The USD51.0bn (EUR46.1bn) Southern Cone region will post an 11.7% CAGR at CER through to 2021. The USD46.8bn (EUR42.3bn) Andean region will post a 7.5% CAGR at CER through to 2021. The USD81.5bn (EUR73.7bn) Central America region will post a 6.4% CAGR at CER through to 2021. Meanwhile, the USD29.8bn (EUR26.9bn) Caribbean region will post a 9.5% CAGR through to 2021.

A major driver of increasing healthcare expenditure is the region's commitment to healthcare. The rising incidence of non-communicable diseases amongst an increasing middle-class population with a strong bias towards branded drugs will continue to boost healthcare spending. Indeed, in the long term, as access to healthcare improves, considerable commercial opportunities will be available for drugmakers, medical device companies and healthcare providers. However, the region's political environment will remain volatile, suggesting substantial downside risks to economic growth and policy continuity - increasing risks to short-term regional growth prospects for multinational healthcare providers as governments focus on containing spending.

Healthcare Market Forecast
2012-2026
f = BMI forecast. Source: World Health Organization, BMI

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