Greg Brown Presentation March 0805

Outlook for Latin America Panorama in 2005 WTC Palm Beach March 7, 2005 West Palm Beach

Latin Trade Community 1997

2004

1993

USA Latin America 30.142

74.349

86.000

Politics in 2005 Global USA Mexico Brazil

Worldwide recovery Bush: Building a legacy Fox: Lame duck Lula: Building a legacy, too

Argentina Venezuela Colombia Chile

Kirchner: Recovery and debt Chavez: Going nowhere soon Uribe: Pax economica Presidenta?

Recovery in Latin America • Accelerated growth • Limited capital flows, comparatively • Exchange rate appreciation—export problems • Inflationary pressures

Economic Forecast GDP % change on year ago LT Consensus Forecast* Argentina Brazil Chile Colombia Ecuador Mexico Peru Venezuela

2004E 8.1 5.1 5.5 3.7 5.4 4.4 4.3 17.3

2005F 5.3 3.8 5.5 3.5 3.1 3.6 4.0 5.1

2006F 3.5 4.0 4.8 3.4 3.2 3.7 3.8 3.9

*LT Consensus Forecast includes projections of ABN AMRO, Banamex, BBVA, Bear Stearns, CS First Boston, Goldman Sachs, J.P. Morgan Chase, Merrill Lynch, Morgan Stanley, Santander Central Hispano Investment, Salomon Smith Barney, UBS Warburg,

Nominal GDP 800

US$ billions

700

Mexico

600

Brazil

500

Argentina Venezuela

400

Colombia

300

Chile

200 100 0 2000

2001

SOURCE: IMF, LATIN TRADE

2002

2003

2004E

2005F

Private Capital Flows Asia 45%

E. Europe 37%

60 US$ billions

Latin America 14%

50

Africa/M.East 4%

40 30 20 10 0 2001

2002

SOURCE: Institute of International Finance

2003

2004

2005F

Principal Blocs • NAFTA: Mexico, U.S. and Canada • Mercosur: Brazil, Argentina, Uruguay and Paraguay • Andean Pact: Venezuela, Colombia, Ecuador, Peru and Bolivia • Central American Common Market: Guatemala, Honduras, El Salvador, Nicargua and Costa Rica

Outlook 2005-2006 Global USA Mexico Brazil

Asia matters more than ever US$11 trillion drives global economies Following USA—for better or worse South-South deals continue

Argentina Venezuela Colombia Chile

Just another Latin American economy Corruption, black-box economics Increasing trade = stability Turning macro success into micro

Greg Brown Editor-in-Chief Latin Trade gbrown@latintrade.com [1] (305) 702-5708