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Contents
• External context
• Macroeconomic trends
• Policy trends
• Prospects
External context
•
Low GDP growth continued in Latin America and
the Caribbean in 2013, at around 2.6%
•
Growth has been conditioned by three factors:
₋
Less dynamic external demand, though with signs
of a point of inflexion during the second half of
2013
₋
Increased financial volatility associated with the
prospects of a reduction in monetary stimulus in
the United States
₋
Less dynamic regional consumption that has not
been compensated by investment or net exports
Global growth declined in 2013, with some
improvement in 2014
REAL GDP GROWTH BY SELECTED REGIONS AND COUNTRIES, 2010-2014
(In percentages)
12
10.3
10
9.2
8
7.7
7.6
5.8
6
2
5.1
4.7
4.3
4
2.5
2
7.5
5.8
4.7
4
7.6
2.9
2.8
2.4
2.8
1.8
1.6
4.5
2
2.9
2.6
2.1
1.9
1.5
3.2
2.5
1.1
0
-0.6
-0.7
-0.5
-2
2010
2011
World
United States
Developing countries
Japan
Source: UN/DESA, Link GEO October 2013.
a Estimations.
2012a
2013a
2014a
Eurozone
Latin America and the Caribbean
China
1.3
External demand remains subdued, but there are
signs of a recovery
IMPORTS OF THE EUROPEAN UNION*, THE UNITED STATES AND CHINA
(Year-on-year change in percentages)
40
China
30
EU27
20
USA
10
0
-10
2011.I
2011.II 2011.III 2011.IV 2012.I
2012.II 2012.III 2012.IV 2013.I
2013.II 2013.III
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
* EU 27: 27 countries, extraregional trade.
In 2013, the monetary and fiscal policies of the USA
served to increase international financial volatility
SELECTED EMERGING COUNTRIES: NOMINAL EXCHANGE RATES AGAINST THE
UNITED STATES DOLLAR
(Index of December of 2012=100)
130
125
120
South Africa
Australia
India
Brazil
Chile
Russia
115
110
105
100
95
90
85
80
May
Possible end of
stimulus of FED
August
Evidence of
disagreements in the
FED about stimulus
September
Announcement of
delay in ending
stimulus
October
Fiscal problems
in the USA are
temporarily
resolved
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Macroeconomic trends
The trend of slowing growth in the region
appears to have halted in 2013, but at a low rate
LATIN AMERICA AND THE CARIBBEAN: YEAR-ON-YEAR QUARTERLY
VARIATIONS OF GROSS DOMESTIC PRODUCT
(Percentages based on dollars at constant 2005 prices)
8
7
6
5
4
3
2
1
0
I
II
III IV
2010
I
II
III IV
2011
I
II
III IV
2012
I
II
III IV
2013
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Consumption continued to be the component of
demand that sustained growth (be it low)
LATIN AMERICA: CHANGE IN GDP AND CONTRIBUTION OF DEMAND
(Percentages based on dollars at constant 2005 prices)
10
8
6
4
2
0
-2
Net exports
Investment
Total consumption
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
2013 a
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
-4
GDP
Modest growth persisted in 2013
LATIN AMERICA: GDP GROWTH RATES, 2013 a
(In percentages)
Paraguay
13.0
Panama
7.5
Bolivia (Plur. State. of)
6.4
Peru
5.2
Nicaragua
4.6
Uruguay
4.5
Argentina
4.5
Chile
4.2
Colombia
4.0
Haiti
4.0
Ecuador
3.8
Guatemala
3.4
Costa Rica
3.2
Dominican Republic
3.0
Cuba
3.0
LAC
2.6
Honduras
2.6
Brazil
2.4
El Salvador
1.7
Mexico
1.3
The Caribbean
1.3
Venezuela (Bol. Rep. of)
1.2
0
5
10
15
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
Modest growth persisted in 2013
THE CARIBBEAN: GDP GROWTH RATES, 2013 a
(In percentages)
Guyana
4.8
Suriname
3.9
St Vincent and the Grenadines
2.1
Trinidad and Tobago
1.6
St Kitts and Nevis
1.6
Belize
1.6
Bahamas
1.6
Granada
1.5
Antigua and Barbuda
1.5
The Caribbean
1.3
Santa Lucia
1.1
Jamaica
0.1
Dominica -0.5
Barbados -0.7
-1
0
1
2
3
4
5
6
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
Job creation in the region decelerated
7.0
1.0
6.0
0.8
5.0
0.6
4.0
3.0
0.4
2.0
0.2
1.0
0.0
0.0
-0.2
-1.0
GDP (left axis)
2013 a
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
-0.6
2002
-3.0
2001
-0.4
2000
-2.0
Change in employment rate (% points)
GDP (%)
LATIN AMERICA AND THE CARIBBEAN: ECONOMIC GROWTH AND
EMPLOYMENT RATE, 2000-2013
Employment rate (right axis)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
Growth in real salaries also slowed
LATIN AMERICA (SELECTED COUNTRIES): REAL AVERAGE SALARIES INTHE
FORMAL SECTOR, 2011 – FIRST TO THIRD QUARTER OF 2013
(Year-on-year change in percentages)
8
6
4
2
0
BRA CHI COL CRI MEX NIC PAN PRY URY VEN
-2
-4
-6
2011
2012
Q1-Q3 2013
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Commodities prices continued to trend downwards
PRICE INDICES FOR EXPORT COMMODITIES (WEIGHTED BY THE VALUE OF
EXPORTS)
(2005=100)
300
280
260
240
220
200
180
160
140
120
Minerals and metals
Oil and oilseeds
Energy
Food
Forestry and agricultural raw
materials
Tropical beverages
100
80
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures from the United Nations
Conference on Trade and Development (UNCTAD) and the Netherlands Bureau of Economic Policy Analysis(CBP).
Terms of trade deteriorated generally across
the region
LATIN AMERICA: ESTIMATED VARIATION IN TERMS OF TRADE, 2011-2013a
(In percentages)
Mexico
Brazil
The Caribbean (except T&T)
Exporters of hydrocarbons
(BO,CO,EC,VE,TT)
Central America and the Dominican
Republic
Exporters of agro-industrial products
(AR,PY,UY)
Exporters of minerals and metals (CL,PE)
Latin America and the Caribbean
-15% -10% -5%
2011
0%
5%
2012
10% 15% 20%
2013
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a The figures for 2013 are projections.
Exports: lower prices were compensated (partially)
by increased volume
LATIN AMERICA: VARIATION IN EXPORTS BY VOLUME AND PRICE, 2013 a
(In percentages)
4
3
2
1
0
-1
-2
-3
-4
-5
Latin America
South America
(except Brazil)
Volume
Central America
Price
Brazil
Mexico
Value
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
The deterioration of the trade balance deepened
the current account deficit
LATIN AMERICA: STRUCTURE OF THE CURRENT ACCOUNT, 2006-2013a
(In percentages of GDP)
6
5
4
3
2
1
0
-1
-2
-3
-4
2006
2007
2008
2009
2010
Goods balance
Services balance
Current transfers balance
Current account balance
2011
2012
Income balance
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a The figures for 2013 are projections.
2013
The investment ratio stagnated but registered
increased external financing (saving)
LATIN AMERICA: FINANCING OF GROSS DOMESTIC INVESTMENT, 2000-2013 a
(Percentages based on dollars at constant 2005 prices)
25
23
20
18
15
13
10
8
5
3
External saving
Gross national saving
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
-3
2000
0
Gross domestic investment
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a The figures for 2013 are projections.
Short-term capital exited the region while FDI and portfolio
investment grew
LATIN AMERICA (17 COUNTRIES): COMPONENTS OF THE FINANCIAL ACCOUNT,
2006-2013 a
(In percentages of GDP)
5
4
3
2
1
0
-1
-2
2006
2007
2008
2009
2010
2011
2012
2013
Other Net Investment Liabilities
Net Portfolio Investment
Net Foreign Direct Investment
Financial Account Balance
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a The figures for 2013 are projections.
Portfolio investment: continued access to
international financial markets
LATIN AMERICA: EXTERNAL BOND ISSUES AND COUNTRY RISK
(Millions of dollars and basis points)
25,000
600
500
20,000
400
15,000
300
10,000
200
5,000
100
0
0
Private
Banks
Sovereign
Quasi-sovereign
EMBI+ Latin America (right axis)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures from JP Morgan and Latin
Finance.
Policy trends
Moderately counter cyclical fiscal policies were
adopted in response to slow growth…
LATIN AMERICA (19 COUNTRIES): CENTRAL GOVERNMENT FISCAL
INDICATORS, 2000-2013 a
(In percentages of GDP)
24
10
22
8
6
20
4
18
2
16
0.0 0.2
14
12
- 2.3
- 1.7
- 1.0
- 2.9 - 2.7 - 2.6
0
- 0.5
- 1.8 - 1.6 - 2.1
- 2.4
- 2.8
10
-2
-4
-6
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Overall balance (right axis)
Total revenue (left axis)
Total expenditure (left axis)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures of official budgets and
estimations.
a Simple averages. Data for 2013 are estimates.
…which led to a certain easing of fiscal targets in the
countries of Latin America…
LATIN AMERICA: OVERALL BALANCE AND GROSS PUBLIC DEBT, 2013 a
(In percentages of GDP)
4
Overall balance 2013
2
PER
0
CHL
BOL NIC
HTI
URY ARG
COL
LAT.
AM.
PRY
SLV
GTM MEX DOM
PAN
-2
-4
ECU
-6
BRA
OECD
CRI
HON
-8
-10
0
20
40
60
80
Gross public debt 2013
Source: Economic Commission for Latin America and the Caribbean (ECLAC) and OECDstat.
a Data for 2013 are estimates.
100
120
…and the Caribbean
THE CARIBBEAN: OVERALL BALANCE AND GROSS PUBLIC DEBT, 2013 a
(In percentages of GDP)
15
KNA
Overall balance 2013
10
5
0
ATG
VCT BLZ
CARIBBEAN
SUR TTO
GUY
BRB
BHS
LCA GRE
LAT. AM.
-5
JAM
OECD
DMA
-10
0
20
40
60
80
100
Gross public debt 2013
Source: Economic Commission for Latin America and the Caribbean (ECLAC) and OECDstat.
a Data for 2013 are estimates.
120
140
Public expenditure maintained its upward trend with a
modest increase in investment (capital) levels
LATIN AMERICA AND THE CARIBBEAN: CENTRAL GOVERNMENT EXPENDITURES,
2012-2013
(In percentages of GDP)
35
30
25
20
15
10
5
0
2012
2013
Latin America and the
Caribbean (33 countries)
2012
2013
2012
2013
Latin America (19 countries) The Caribbean (13 countries)
Primary current expenditure
Capital expenditure
Interest
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of figures of official budgets and
estimations.
The international context generated an increase in
exchange rate volatility…
SELECTED COUNTRIES: NOMINAL EXCHANGE RATES AGAINST THE UNITED
STATES DOLLAR
(Index of January of 2008=100)
140
130
Brazil
120
Mexico
110
Chile
100
90
80
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Uruguay
Colombia
Peru
0
Source: Bloomberg.
Brazil
Chile
Colombia
Mexico
Peru (right axis)
01-10-2013
01-07-2013
01-04-2013
01-01-2013
01-10-2012
01-07-2012
01-04-2012
01-01-2012
01-10-2011
01-07-2011
01-04-2011
01-01-2011
01-10-2010
01-07-2010
01-04-2010
01-01-2010
01-10-2009
01-07-2009
01-04-2009
01-01-2009
01-10-2008
01-07-2008
01-04-2008
01-01-2008
01-10-2007
01-07-2007
01-04-2007
01-01-2007
…as well as fluctuations in the region’s stock markets
SELECTED COUNTRIES: STOCK MARKETS
(Index of January of 2006=100)
250
450
400
200
350
300
150
250
100
200
150
50
100
50
0
With the exception of Brazil, lower inflationary
pressures have permitted the reduction of monetary
policy rates
COUNTRIES WITH INFLATION TARGETS: CHANGES IN MONETARY POLICY RATES
BY DATE, 2013
Country
Brazil
Increase
Decrease
April 18
May 30
July 11
August 29
October 10
November 28
Chile
October 18
November 20
Colombia
January 29
February 25
March 26
Guatemala
April 25
October 30
Mexico
March 8
September 6
October 25
Peru
November 7
Source: Central banks.
The majority of countries using a monetary aggregates
approach maintained money growth rates of around
10%
GROWTH OF MONETARY AGGREGATES, ANUALIZED VARIATION OF M1
(In percentages)
35
30
South America *
25
20
South America (excl
Argentina and Venezuela
(Bol. Rep. of))
Dollarized countries **
The Caribbean (English
speaking)
Central America ***
15
10
5
-5
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
0
2011
2012
2013
The Caribbean (English speaking)
Central America*
South America**
South America (excl Argentina and Venezuela (Bol. Rep. of ))
Dollarized countries***
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
*Argentina, Bolivia (Plur. State. of), Paraguay, Uruguay and Venezuela (Bol. Rep. of).
**Ecuador, El Salvador and Panama.
***Costa Rica, Honduras and Nicaragua
Inflation trajectories differed across the region
depending on the monetary policies adopted
LATIN AMERICA AND THE CARIBBEAN: 12-MONTH INFLATION, JANUARY 2007 TO
OCTOBER 2013
(Simple average)
16
14
12
10
8
6
4
2
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
0
2007
2008
2009
2010
2011
2012
2013
Latin America and the Caribbean
The Caribbean
South America
México
South America (excl. Argentina, Brazil and Venezuela (Bol. Rep. of))
Brazil
Central America
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
International reserves ceased to grow as in previous
years, while debt remained low
GROSS INTERNATIONAL RESERVES AND TOTAL GROSS EXTERNAL DEBT
(Millions of dollars and percentages of GDP)
900,000
60
800,000
50
600,000
40
500,000
30
400,000
300,000
20
200,000
10
100,000
0
0
2002
2003
2004
2005
2006
Latin America and the Caribbean
2007
2008
Brazil
2009
2010
2011
2012
2013
Gross external debt (right axis)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
Percentage of GDP
Millions of dollars
700,000
Prospects
A moderate recovery in growth is projected for 2014
LATIN AMERICA: GDP GROWTH RATES, 2014 a
(In percentages)
Panama
7.0
Bolivia (Plur. State. of)
5.5
Peru
5.5
Nicaragua
5.0
Dominican Republic
5.0
Colombia
4.5
Haiti
4.5
Ecuador
4.5
Paraguay
4.3
Chile
4.0
Costa Rica
4.0
Uruguay
3.5
Guatemala
3.5
Mexico
3.5
LAC
3.2
Cuba
3.0
Honduras
3.0
Argentina
2.6
Brazil
2.6
El Salvador
2.6
The Caribbean
2.1
Venezuela (Bol. Rep. of)
1.0
0
2
4
6
8
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
A moderate recovery in growth is projected for 2014
THE CARIBBEAN: GDP GROWTH RATES, 2014 a
(In percentages)
Suriname
4.7
Guyana
4.6
St Kitts and Nevis
2.9
Belize
2.8
Bahamas
2.5
Santa Lucia
2.3
The Caribbean
2.1
Trinidad and Tobago
2.1
Antigua and Barbuda
1.5
St Vincent and the Grenadines
1.4
Granada
1.3
Jamaica
1.2
Dominica
1.2
Barbados
1.0
0
1
2
3
4
5
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures.
a Projections.
Threats and opportunities
Threats
External context
 Volatility and an increased cost of external
financing
 Limited contribution of consumption to GDP
growth:
Regional context

Slowdown in wages and credit

Limited fiscal impulse
 External vulnerability:

Deterioration of the current account with a growing cost to
finance its deficit
Threats and opportunities
Opportunities
External context
 Moderate growth of global trade
 Larger deficit of the current account:

Regional context
results in depreciation that modifies relative prices
 Complementary policies: macro, industrial,
SMEs, environmental, social and trade, as well
as infrastructure. Opportunity to:

Invest more in diversified tradables and exports

Reduce structural heterogeneity
 Regional integration: trade and complementary
specialization
The challenge of fostering growth with equality: social
covenants for investment (productivity) with three
dimensions
SOCIAL COVENANT DIAGRAM
Institutional framework:
Clear rules, certainty and equal
participation of actors
Short-term policies
(counter cyclical) :
nominal and real stability
Source: Economic Commission for Latin America and the Caribbean (ECLAC).
Long-term policies:
investment in the
diversification of tradables