South America: update on capital stock

South America includes five modeled countries. Annual growth in capital stock for these countries ranged from Ecuador's minimum annual growth rate of 4 percent to Chile's maximum rate of 10 percent. Capital stock growth has been slower in Ecuador compared to other South American countries due to continued struggles in attracting new investment, including recent declines in foreign direct investment. In Peru, Columbia, and Chile, values have increased from both new construction and increased prices.

Venezuela continues to struggle economically, dealing with severe hyperinflation as well as currency exchange rate issues. No official figures for recent new investment or inflation are available for Venezuela, but estimates are provided from international organizations, such as the United Nations and International Monetary Fund. The effects of hyperinflation, parallel exchange rates, and uncertainty surrounding reported macroeconomic data mean that the industry exposure index should be interpreted with caution. The industry exposure index for Venezuela from 2014 to 2024 is 430,000,000,000 using the Bolivar Fuerte (VEF). The index reflects hyperinflation of Venezuela’s local currency. In 2018, the instability of the Bolivar Fuerte led to the creation of a new currency, the Bolivar Soberano (VES), which cut 5 zeros off the old currency. In 2021, the VES was further re-denominated to remove 6 zeros and renamed the Bolivar Soberano Digitales (VED). Hyperinflation, changing currency, and discrepancies between Venezuela’s official exchange rate and parallel (e.g., price-adjusted and black market) exchange rates, distort the value of Venezuelan currency relative to the U.S. dollar (USD). Converting VEF to USD, the industry exposure index would be between 3 and 4 percent, representing approximately 15 percent annualized growth in terms of U.S. dollars.