Latin America's most economically competitive countries are Chile, Panama, Brazil, Mexico and Peru, according to a new report by the World Economic Forum.

The five countries saw gains as other countries, particularly in Europe, struggled amid mounting debt and slowing growth.

“Persisting divides in competitiveness across regions and within regions, particularly in Europe, are at the origin of the turbulence we are experiencing today, and this is jeopardizing our future prosperity.” said Klaus Schwab, founder and executive chairman, World Economic Forum (WEC), in a statement. “We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path.”

Chile was the 33rd most competitive country in the world, with a population of 17.6 million in 2011 and GDP of $248.4 billion. Its strengths included a strong macroeeconomic environment and its healthcare systems, according to the report. But restrictive labor regulations and poor education among workers were flaws.

Panama was the 40th most competitive country in the world. It has only 3.6 million people and a GDP of $30.6 billion, but benefitted from financial market development and technology readiness. Corruption and an inefficient government were seen as the biggest problems, the WEF said in its report.

Brazil was 48th, with a 2011 population of nearly 200 million and GDP of $2.49 trillion. Its greatest assets are its healthcare and primary education system, as well as market size. Downsides were tax regulations and rates and an inadequate supply of infrastructure.

Mexico was close behind at 53, with a a population of 116.4 million and GDP of $1.15 trillion. Its market size and healthcare system were advantages, but corruption and crime, particularly tied the drug trade, were seen as its greatestproblems.

"Mexican industry remains in good shape for now, but forward looking indicators suggest that activity is likely to slow towards the end of the year," wrote David Rees, of Capital Economics, in a research report on Tuesday.

Capital Economics forecasts an annual GDP growth to slow to 3 percent in 2013 from 4 percent in the second quarter of this year. With over 80 percent of its Mexico's exports going to the U.S., a slowdown in its northern neighbor would be painful for the country. However, "Mexico’s domestic economy is in decent shape and this should help to cushion any externally-led slowdown," wrote Rees.

Peru was the 61st most competitive country, with a population of 29.7 million and GDP of $173.5 million. Its assets were a macroeconomic environment and strong healthcare. Flaws included an inefficient government bureaucracy and corruption.

One fading South American country has been Argentina, once the second-strongest economy in the western hemisphere. The nation is grappling with high inflation and political stability. It was ranked as the 94th most competitive country, down from 85th in the previous year. Although its market size was a big asset, with $447.6 billion GDP and a population of 41.8 million, the country has struggled to grow.

Despite government efforts to promote lending, Argenine's retail sales have fallen 5.2 percent at an annual rate in August and real estate development plunged 40 percent in August on an annual rate. One of the few bright sides is the agriculture sector, which has benefited from record high soybean prices and a slump in U.S. farming.

"We continue to expect little or no GDP growth this year and are forecasting a 2 percent contraction in 2013," wrote Rees of Capital Economics in a Wednesday research note.