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