Latinoamerica en cifras

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PDF sobre la tendencia económica en América Latina

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Latinoamerica en cifras

  1. 1. Global Economics Researchab Latin America UBS Investment Research New York Latin American Economic Focus LatAm by the Numbers 15 November 2010 (4th Quarter 2010) www.ubs.com/economics What the numbers say: Growth continues to be robust across countries and sectors. Peru, Argentina, Brazil and Chile are leading the way. Mexico, Colombia and especially Venezuela are lagging. Despite domestic demand-led recoveries, Javier Kulesz inflation remains reasonably stable. Inflation targeting countries show rates well Economist within their target bands (Mexico is an exception on account of one-off factors). javier.kulesz@ubs.com Credit is recovering, but growth rates remain at about half of the levels observed +1-203-719 1603 before the crisis. The external accounts remain solid, with high and growing capital Andre Carvalho account surpluses (>3% of GDP) financing both a small current account deficit Economist (<1% of GDP) and large foreign reserve accumulation. Import growth has andre-c.carvalho@ubs.com stabilized at 35% y/y, 6 ppts above export growth. The region is showing an +55-11-3443 6345 improvement in its fiscal position to -2% of GDP in 2010 from -3.2% in 2009, but Rafael De La Fuente this is mostly due to rapidly rising revenue growth. Prior to the crisis, the region’s Economist fiscal balance used to be between 0 and -1% of GDP. Labor markets are improving rafael.delafuente@ubs.com for the most part, with countries enjoying declining unemployment rates and rising +1 203 719 7127 real wages. Debt to GDP ratios have either stabilized or resumed their downward trend. Other key vulnerability indicators are also heading in the right direction. Venezuela is the sole exception. What the numbers mean: A number of countries are in the midst of a virtuous cycle in which growth in wages, employment and credit fuels domestic aggregate demand feeding back into the labor markets. However, there are already a few economies that appear to be at or near overheating territory (Brazil, Chile, Peru and Argentina). Perhaps due to countries’ own political cycles, fiscal retrenchment has been a disappointment. This is particularly true in the face of impressive recoveries and the large stimulus put in place during the crisis. Higher commodity prices have helped countries to grow at a fast pace without developing material current account deficits. Improvements in debt ratios are largely the result of the denominator effect (high growth and real exchange rate appreciation). 12-month outlook: We see regional growth in 2011 slowing to 4.6% from 6.3% in 2010 with countries facing growing bottlenecks, net export contribution to growth becoming even more negative and higher base effects taking place. We expect the inflation targeting Central Banks to resume their hiking cycles throughout 2011, with all of them meeting their 2011 targets. High growth differentials against much of the world and continued currency strength should contribute to deteriorate the region’s current accounts deficit to 1.7% of GDP in 2011 from 0.8% of GDP in 2010. On the fiscal front, we see improvements in Brazil, Chile, Peru and Colombia, stability in Mexico and deterioration in Argentina and Venezuela. We also expect FX stability pretty much across the board, though we continue to characterize the FX policy regimes in Argentina and Venezuela as unsustainable. Labor markets should continue to recover. Our strategists are not believers in the EM equity bubble story. They see underlying value primarily in Brazil. On the fixed income side, we favor local markets over hard currency bonds. This report has been prepared by UBS Securities LLC ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 38.
  2. 2. Latin American Economic Focus 15 November 2010GDP growth What the numbers say: LatAm has recovered impressively from the crisis. In Q2, the region grew by 6.1% y/y and 2.2% q/q. With the exception of Venezuela, all the countries are printing high growth rates. As a rule of thumb, the further south you go in the region, the faster the GDP growth is. High frequency data of economic activity continues to point to strong economies in Q3, especially in Peru. What the numbers mean: As of Q2, the level of regional economic activity had already surpassed the pre-crisis high by 3.2%. The recovery has been so dramatic that Argentina, Brazil, Chile and Peru have also started to show some signs of overheating. Though performance in Colombia and Mexico is decent, they appear to have at least a couple of quarters to go before overheating becomes a major concern. 12-month outlook: We expect overheating countries to slow towards rates more consistent with their +/-5% medium term averages (somewhat higher for Peru and Chile and somewhat lower for the rest). Growing bottlenecks, more negative net export growth contribution and higher base effects will constrain their performance. We see regional growth in 2011 at 4.6%, down from 6.3% in 2010.Chart 1: Overall GDP growth Chart 2: Real GDP growth by country (% y/y) 7 y /y % grow th Index Q1-04=100 (RHS) 130 15 ARG BRA CHI COL MEX PER VEN 6 128 5 10 +3.2% from pre- 4 126 crisis high 3 124 5 2 1 122 0 0 120 -1 -5 118 -2 -3 116 -10 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08 Q4/08 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10Source: UBS and Haver. Source: UBS and Haver.Chart 3: Real GDP (sa, Q1-07=100) Chart 4: GDP per capita (USD) 130 12,000 ARG BRA CHI COL ARG BRA CHI COL MEX PER VEN 125 MEX PER VEN 10,000 120 115 8,000 110 105 6,000 100 4,000 95 90 2,000 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010FSource: UBS and Haver. Source: UBS and Haver. UBS 2
  3. 3. Latin American Economic Focus 15 November 2010GDP growth by component What the numbers say: Domestic aggregate demand is by far the main driver for growth. Current growth decomposition is in sharp contrast with performance observed during the crisis, where domestic aggregate demand contributed negatively and net exports positively. As in the previous GDP growth section, we can also apply the rule of thumb that the further south you go, the faster domestic aggregate demand growth is. What the numbers mean: Many countries are in the midst of a virtuous cycle in which higher credit growth, improving conditions in the labor market and accommodative fiscal policies are feeding into something close to an explosion in consumption and investment. However, Mexico but especially Venezuela, face different dynamics. 12-month outlook: There is a bifurcated view here. In the overheating countries (Chile, Peru, Argentina and Brazil), domestic aggregate demand growth is due for a slowdown. It can’t simply sustain double digit growth rates forever. However, in Mexico and to a lesser extent Colombia, we would expect continued strength in some ways playing catch up with their southern neighbours.Chart 5: LatAm real GDP growth by components (% y/y) Chart 6: Brazil real GDP growth by components (% y/y) 10 Total consumption Inv estment Net ex ports GDP (RHS) 7 12 Total consumption Inv estment Net ex ports GDP 8 6 10 5 8 6 4 6 4 3 4 2 2 2 0 1 0 0 -2 -2 -1 -4 -2 -4 -6 -3 -6 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10Source: UBS and Haver. Source: UBS and Haver.Chart 7: Argentina real GDP growth by components (% y/y) Chart 8: Mexico real GDP growth by components (% y/y) 12 Total consumption Inv estment Net exports GDP 8 10 6 4 8 2 6 0 4 -2 2 -4 -6 Total consumption Investment 0 -8 Net ex ports GDP -2 -10 -4 -12 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10Source: UBS and Haver. Source: UBS and Haver. UBS 3
  4. 4. Latin American Economic Focus 15 November 2010GDP growth by component, continuedChart 9: Chile real GDP growth by components (% y/y) Chart 10: Colombia real GDP growth by components (% y/y) 25 Total consumption Inv estment Net exports GDP 12 Total consumption Investment Net exports GDP 20 10 15 8 10 6 5 4 0 2 -5 0 -10 -2 -15 -4 -20 -6 Q 1 /0 7 Q 2 /0 7 Q 3 /0 7 Q 4 /0 7 Q 1 /0 8 Q 2 /0 8 Q 3 /0 8 Q 4 /0 8 Q 1 /0 9 Q 2 /0 9 Q 3 /0 9 Q 4 /0 9 Q 1 /1 0 Q 2 /1 0 Q 1 /0 7 Q 2 /0 7 Q 3 /0 7 Q 4 /0 7 Q 1 /0 8 Q 2 /0 8 Q 3 /0 8 Q 4 /0 8 Q 1 /0 9 Q 2 /0 9 Q 3 /0 9 Q 4 /0 9 Q 1 /1 0 Q 2 /1 0Source: UBS and Haver. Source: UBS and Haver.Chart 11: Venezuela real GDP growth by components (% y/y) Chart 12: Peru real GDP growth by components (% y/y) 40 Total consumption Inv estment Net ex ports GDP (RHS) 12 18 Total consumption Investment Net exports GDP 10 15 30 8 12 20 6 9 10 4 6 2 0 3 0 0 -10 -2 -4 -3 -20 -6 -6 -30 -8 -9 Q 1 /0 7 Q 2 /0 7 Q 3 /0 7 Q 4 /0 7 Q 1 /0 8 Q 2 /0 8 Q 3 /0 8 Q 4 /0 8 Q 1 /0 9 Q 2 /0 9 Q 3 /0 9 Q 4 /0 9 Q 1 /1 0 Q 2 /1 0 Q 1 /0 7 Q 2 /0 7 Q 3 /0 7 Q 4 /0 7 Q 1 /0 8 Q 2 /0 8 Q 3 /0 8 Q 4 /0 8 Q 1 /0 9 Q 2 /0 9 Q 3 /0 9 Q 4 /0 9 Q 1 /1 0 Q 2 /1 0Source: UBS and Haver. Source: UBS and Haver. UBS 4
  5. 5. Latin American Economic Focus 15 November 2010Consumption What the numbers say: Consumption in Q2 grew by 5.2% y/y and 1.7% q/q. It’s been the most dynamic component of aggregate demand since the crisis began. Both private and public consumption are important drivers. Recent retail sales numbers continue to point to strength into Q3. This is particularly true in Chile, Argentina and Colombia. Brazil is actually showing some stabilization. What the numbers mean: In a number of counties, there is a consumption boom going on, especially in durables. The re-emergence of credit, the recovery of employment, wages and accommodative fiscal stance are fuelling these dynamics. 12-month outlook: Consumption will continue to be a key driver in the quarters to come, but a slowdown in the fastest growing economies is bound to happen. Spending growth in autos and other key durables would slow markedly from the current torrid pace. Public spending growth should also ease, especially in the many countries that have put their recent elections behind. At the other end is lagging Mexico, which could play catch-up in the face of signs of recovery in its labor market. However, without credit support, it is unlikely to soar.Chart 13: LatAm total real consumption Chart 14: Real consumption (Q1-07=100) 7 y /y % growth Index Q1-04=100 (RHS) 132 125 ARG BRA CHI COL MEX PER 6 130 120 5 128 115 4 126 3 124 110 2 122 105 1 120 100 0 118 -1 116 95 Q 1 /07 Q 2 /07 Q 3 /07 Q 4 /07 Q 1 /08 Q 2 /08 Q 3 /08 Q 4 /08 Q 1 /09 Q 2 /09 Q 3 /09 Q 4 /09 Q 1 /10 Q 2 /10 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10Source: UBS and Haver. Source: UBS and Haver..Chart 15: Total consumption by components (% of GDP) Chart 16: Real retail sales (% y/y, 3m ma) 100 50 ARG BRA CHI COL MEX VEN Priv ate consumption Public consumption 90 40 80 30 70 60 20 50 10 40 0 30 20 -10 10 -20 0 S e p -0 6 S e p -0 7 S e p -0 8 S e p -0 9 S e p -1 0 J a n -0 6 J a n -0 7 J a n -0 8 J a n -0 9 J a n -1 0 M a y -0 6 M a y -0 7 M a y -0 8 M a y -0 9 M a y -1 0 ARG BRA CHI COL MEX PER VENSource: UBS and Haver. Source: UBS and Haver. UBS 5
  6. 6. Latin American Economic Focus 15 November 2010Investment What the numbers say: Investment was the fastest driver for growth in Q2 (up +22.2% y/y and 4.9% q/q sa, not a total surprise given that it typically tracks the economic cycle but with a higher beta). As a result, investment to GDP ratios have started to increase again after the contraction experienced during the crisis. A particularly weak performance in Mexico weighs on investments at the regional level. What the numbers mean: Recovery in credit, low financing costs, and an explosion in consumption have created a better environment for companies to invest. That said, overall investment levels are still rather mediocre for the region to approach Asian-style growth rates. 12-month outlook: We expect investment to remain the most important contributor to growth in the quarters to come. This is particularly true in Brazil, Chile and Peru, primarily in energy, mining and key manufacturing sectors. These dynamics can also be fuelled by the various government incentive programs to promote investments.Chart 17: LatAm total real investment Chart 18: LatAm total real investment (Q1-07=100) 25 y /y % growth 160 150 ARG BRA CHI COL MEX PER Index Q1-04=100 (RHS) 20 155 140 15 150 130 10 145 5 120 140 0 110 135 -5 100 -10 130 125 90 -15 -20 120 80 Q 1/0 7 Q 2/0 7 Q 3/0 7 Q 4/0 7 Q 1/0 8 Q 2/0 8 Q 3/0 8 Q 4/0 8 Q 1/0 9 Q 2/0 9 Q 3/0 9 Q 4/0 9 Q 1/1 0 Q 2/1 0 Q 1/07 Q 2/07 Q 3/07 Q 4/07 Q 1/08 Q 2/08 Q 3/08 Q 4/08 Q 1/09 Q 2/09 Q 3/09 Q 4/09 Q 1/10 Q 2/10Source: UBS and Haver. Source: UBS and Haver.Chart 19: Real fixed capital investment growth 2/ Chart 20: Fixed capital investment (% of GDP, 4q ma) 40 27 ARG BRA CHI COL MEX PER y/y %, NSA q/q %, SA 35 25 30 25 23 20 21 15 10 19 5 17 0 -5 15 Q 1 -0 4 Q 3 -0 4 Q 1 -0 5 Q 3 -0 5 Q 1 -0 6 Q 3 -0 6 Q 1 -0 7 Q 3 -0 7 Q 1 -0 8 Q 3 -0 8 Q 1 -0 9 Q 3 -0 9 Q 1 -1 0 ARG BRA CHI COL MEX PERSource: UBS and Haver. Source: UBS and Haver2/ All data corresponds to Q2-10. UBS 6

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