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Transcript
Latin American
Spotlight
June 2002
LATIN AMERICA AT A GLANCE
DOMESTIC ECONOMY
Argentina
GDP change
Inflation
Budget balance
in % (real)
in % (year-end)
in % of GDP
2001
2002f
2003f
2001
2002f
2003f
2001
2002f
2003f
-4.5
-13.0
1.0
-1.5
80.0
30.0
-5.6
-2.6
-1.1
Bolivia
0.5
2.5
4.0
0.9
2.8
3.6
-7.0
-5.2
-4.0
Brazil
1.5
2.1
3.7
7.7
5.5
4.2
-3.6
-3.6
-3.6
Chile
2.8
2.8
4.5
2.6
3.6
3.6
-1.5
-1.4
-1.3
Colombia
1.6
1.6
2.5
7.7
6.2
5.9
-3.4
-3.1
-2.9
Costa Rica
0.9
2.0
3.5
11.0
9.0
10.0
-2.9
-3.2
-3.0
Dominican Republic
2.7
3.8
5.5
4.4
4.9
5.7
0.2
-0.3
0.0
Ecuador
5.6
3.5
3.2
22.4
10.0
8.0
1.3
1.2
0.5
El Salvador
1.8
2.5
2.7
1.4
1.8
2.2
-3.5
-3.8
-3.6
Guatemala
2.1
2.3
2.8
8.9
9.0
9.0
-3.0
-2.2
-2.0
Honduras
2.6
3.0
3.4
8.8
9.0
9.0
-2.5
-2.0
-1.0
Jamaica
1.7
2.2
2.6
8.8
7.5
6.0
-5.7
-5.5
-4.0
Mexico
-0.3
1.7
4.5
4.4
4.0
3.2
-0.7
-0.7
-0.5
3.0
3.6
4.0
4.8
5.0
5.1
-18.0
-15.0
-10.0
Nicaragua
Panama
0.3
1.0
2.0
0.0
0.4
0.8
-1.4
-1.7
-1.5
Paraguay
0.5
0.5
1.5
8.4
7.5
6.8
-1.4
-2.8
-2.6
Peru
0.2
3.0
3.9
-0.1
2.1
2.4
-2.4
-2.9
-2.4
Trinidad & Tobago
3.5
4.0
3.0
3.2
4.0
4.0
-0.5
-0.7
-0.5
-3.1
-3.7
1.8
3.6
11.5
9.0
-4.2
-3.5
-3.8
Venezuela
2.7
-4.3
1.0
12.3
34.0
19.0
-4.4
-4.1
-3.7
Latin America (17 countries)
0.1
-0.6
3.4
5.3
16.1
8.1
Uruguay
EXTERNAL SECTOR
Current account balance
Import cover
Gross foreign debt
FOREIGN DEBT
in % of GDP
in months*
in % of exports*
2001
2002f
2003f
2002f
2003f
2001
2002f
2003f
Argentina
-1.6
6.0
8.5
5.7
4.4
4.7
360
371
343
Bolivia
-5.9
-4.7
-5.1
3.7
4.2
3.9
219
228
225
Brazil
-4.6
-3.9
-3.6
4.5
4.3
4.1
296
291
260
Chile
-1.9
-2.5
-1.6
6.8
6.5
6.3
161
155
145
Colombia
-2.0
-2.9
-3.6
6.2
6.0
5.5
244
263
263
Costa Rica
-4.5
-5.3
-5.5
2.0
1.8
1.4
69
72
71
Dominican Republic
-3.8
-4.8
-2.9
1.0
1.1
1.2
62
62
57
Ecuador
-4.4
-7.8
-5.7
1.2
1.1
1.2
263
270
262
El Salvador
-1.3
-3.7
-5.2
3.3
3.6
3.4
109
124
133
Guatemala
-6.1
-5.7
-4.8
4.4
3.9
3.4
144
141
134
Honduras
-5.2
-5.7
-4.6
4.5
4.7
4.9
215
210
184
Jamaica
-8.6
-7.1
-5.8
4.4
4.1
3.7
142
147
138
Mexico
-2.8
-2.9
-2.9
2.6
2.7
2.5
91
94
88
216
Nicaragua
-24.1
-25.0
-25.3
2.1
2.4
2.7
741
753
Panama
-5.0
-5.6
-5.8
1.3
1.2
1.2
82
74
74
Paraguay
-3.1
-4.5
-5.3
2.2
2.2
2.3
112
125
141
Peru
-2.0
-1.5
-1.6
8.8
10.2
10.4
351
369
359
3.6
-0.5
0.6
4.9
5.0
5.7
61
64
57
-2.6
-2.1
-1.6
8.2
5.9
6.1
224
259
236
3.3
5.0
5.0
4.2
3.0
2.7
107
114
115
-2.7
-2.3
-2.4
3.9
3.7
3.5
177
182
168
Trinidad & Tobago
Uruguay
Venezuela
Latin America (17 countries)
* goods and services
2
2001
f=forecast
Dresdner Bank Lateinamerika, Spotlight 6/2002, Latin America
TABLE OF CONTENTS
Latin America at a glance
LATIN AMERICA: Overshadowed by political events ________________ 4
Country analyses
ARGENTINA: No plan of action __________________________________ 6
BRAZIL: Lula ante portas? _____________________________________ 12
CHILE: EU agreement signed, sealed and delivered _______________ 18
COLOMBIA: New President facing Herculean challenge ____________ 24
COSTA RICA: Advent of structural reforms? ______________________ 30
ECUADOR: IMF takes a hard stance _____________________________ 32
GUATEMALA: Standby facility of IMF ____________________________ 34
HONDURAS: Priority assigned to alleviating poverty ______________ 36
JAMAICA: Dead-end situation __________________________________ 38
MEXICO: Peso ends its rally ____________________________________ 40
PERU: Slow reforms ___________________________________________ 46
URUGUAY: Without investment grade ____________________________ 52
VENEZUELA: Tight budget situation _____________________________ 54
Financial market indicators Latin Amercia
Stock market indices __________________________________________ 60
Bond yield spreads ___________________________________________ 61
Global economy - figures and forecasts __________________________ 67
Dresdner Bank Lateinamerika, Spotlight 6/2002, Latin America
3
LATIN AMERICA: OVERSHADOWED BY POLITICAL EVENTS
Area
Population (2001)
20.5 million sq. km
524 million (+1.6% p.a.)
Share of global exports
Share of global GDP
GDP per capita
5.8% (2000)
6.4% (2000)
US$ 3 800 (2001)
Exports (2000)
Purchasing countries
USA 54%, Latin American countries 17%, EU 13%, Japan 3%
Imports (2000)
Supplier countries
USA 47%, Latin American countries 16%, EU 15%, Japan 5%
SUMMARY AND OUTLOOK
LATIN AMERICA (17 countries)
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
Inflation (year-end)
%
0.2
3.9
0.1
-0.6
3.4
1722
1909
1845
1738
1781
8.7
7.0
5.3
16.1
8.1
EXTERNAL SECTOR
Merchandise exports
US$ bn
293.0
351.2
337.2
340.3
372.8
Merchandise imports
US$ bn
295.8
343.4
336.1
330.1
360.7
Trade balance
US$ bn
-2.9
7.8
1.2
10.2
12.1
Current account balance
US$ bn
-55.4
-45.6
-49.8
-39.4
-43.6
Current account balance
% GDP
-3.2
-2.4
-2.7
-2.3
-2.4
Net direct investment ***
US$ bn
67.0
67.4
62.1
41.7
46.9
Foreign exchange reserves, year-end
US$ bn
154
158
156
141
146
Import cover **
months
4.4
3.9
3.9
3.7
3.5
Gross foreign debt
US$ bn
742
724
717
738
750
Foreign debt
% exports**
209
171
177
182
168
Short-term foreign debt
US$ bn
114
118
115
116
122
Foreign debt amortization
US$ bn
101
87
88
81
80
Foreign debt service
US$ bn
148
140
138
132
132
Foreign debt service
% exports**
42
33
34
32
30
275
520
516
518
968
692
823
773
FOREIGN DEBT
FINANCIAL MARKETS (year-end)
IFCI stock index (US$ based, 2002: 05/27)
Bond market yield spread (2002: 05/27)*
bps
*JPM Latin America-Eurobond-Portfolio **goods & services ***Mexico & Brazil: only foreign direct investment; f=forecast
4
Dresdner Bank Lateinamerika, Spotlight 6/2002, Latin America
Current events in Latin America are being dominated by politics. In
Colombia the candidate favored by the financial markets, Alvaro Uribe,
was elected the new president; with regard to Brazil market participants
are worried about the high approval ratings in opinion polls of left-wing
candidate Lula; and in Argentina and Ecuador negotiations with the
International Monetary Fund for a new agreement are proving extremely
difficult due to political disunity. In Venezuela events are being determined by the power politics of president Chávez. Mexico is the exception in that the confrontation between the government and the powerful
opposition has not led to adverse macro-economic impacts so far.
GDP CHANGE (REAL)
%
10
LA
Argentina
Brazil
Mexico
5
0
-5
-10
-15
The political events are having repercussions on the prospects of the
individual countries. The new president of Colombia is confronted with
the Herculean task of finding ways of bringing internal peace to the
country and at the same time bringing the public-sector debt situation
under control and creating a basis for economic revival. By strengthening the military and the police force significantly Alvaro Uribe will most
probably make an attempt to exert pressure on the rebel organizations
to such an extent that these will be prepared to resume negotiations
seriously. This process is likely to take years, accompanied by repeated
setbacks. Fears that left-wing populist Lula might become the future
president of Brazil is another contributory factor for the sustained high
level of interest rates. This is impeding consumption and the demand
for industrial goods. We have adjusted our growth forecast for this year
downward from 2.5% to 2.1%.
Instead of successful negotiations with the International Monetary Fund,
the news from Argentina is that the crisis is deepening. The peso depreciated further (70% since the beginning of the year). We perceive an
increasing likelihood of hyperinflation and have lowered our GDP forecast from –10% to –13%. Ecuador, which is also holding talks with the
International Monetary Fund, apparently wants to risk a breakdown of
this year’s negotiations. This is a dangerous game because without
multilateral funding the country’s debt service could be at risk as early
as in the second half of 2003.
Following the failed coup attempt in Venezuela, the uncertainty about
the country’s governability is reflected in an extremely tense budget
situation. The government is currently negotiating with multilateral organizations in order to be able to fill the gaps. Only a change of government would probably brighten up the outlook for the country.
1998
1999
2000
2001
2002f
2003f
BOND SPREADS ARGENTINA/BRAZIL
EMBI+, bps
Argentina
Brazil
7000
6000
5000
4000
3000
2000
1000
0
May-00
Nov-00
May-01
Nov-01
May-02
BOND SPREADS ECUADOR
EMBI+
bps
1800
1600
1400
1200
All in all, Latin America’s GDP will presumably shrink by 0.6% this year
(excluding Argentina, growth would reach 1.5%).
1000
800
Cyrus de la Rubia +49 40 3595 3889
Dresdner Bank Lateinamerika, Spotlight 6/2002, Latin America
May-01
Aug-01
Nov-01
Feb-02
May-02
5
ARGENTINA: NO PLAN OF ACTION
Area
Population
2 736 700 sq. km
36.2 million (+1.1% p.a.)
State president
Economy minister
Central bank president
Eduardo Duhalde
Roberto Lavagna
Mario Blejer
Next elections
September 2003
GDP per capita
US$ 7 450 (2001)
Investment
Savings
15 % of GDP (2001)
14% of GDP (2001)
Exchange rate system
Monetary policy
Flexible exchange rate
monetary expansion target
Exports (2001)
Purchasing countries
Products
10% of GDP
Mercosur 28%, EU 17%, NAFTA 14%
Primary goods and crude oil 41%,
industrial goods 31%, processed
agricultural produce 28%
Imports (2001)
Supplier countries
Products
8% of GDP
Mercosur 29%, EU 23%, NAFTA 22%
Capital goods 37%, intermediate goods 36%,
consumer goods 20%
Rating:
Moody’s: Ca
S&P: SD
SUMMARY AND OUTLOOK
After four months in office, the Duhalde government has not managed to find a solution to the deep-seated economic and
financial crisis. What is particularly concerning are the differences of opinion between the ministry for the economy and
the central bank regarding the streamlining of the severely ailing banking sector. In addition, it is unclear whether there
will be a new IMF agreement. The crucial issue will be whether the provinces will be prepared to accept adequate
spending cuts. In the past, they have reacted to the shortfalls in revenues primarily by issuing their own quasi-money. An
IMF agreement would be important for Argentina, not so much because of the (most probably restricted) new loans, but
as a first, serious sign of a coherent economic policy. Unless economic policy measures are found to point the way
ahead soon – with or without the IMF – further violent protests and a slide into hyper-inflation will be difficult to avoid.
6
Dresdner Bank Lateinamerika, Spotlight 6/2002, Argentina
ANNUAL FIGURES AND FORECASTS
ARGENTINA
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
-3.4
-0.5
-4.5
-13.0
1.0
283.4
285.2
269.9
99.0
96.0
Inflation (year-end)
%
-1.8
-0.7
-1.5
80.0
30.0
Inflation (average)
%
-1.2
-0.9
-0.9
42.0
44.8
PUBLIC SECTOR
Budget balance, central government
% GDP
-2.6
-2.3
-3.7
-1.8
-0.7
Budget balance, public sector
% GDP
-4.0
-3.5
-5.6
-2.6
-1.1
Public debt*
% GDP
43
45
54
146
156
Amortization*
US$ bn
11.4
12.2
11.9
15.4
18.4
Gross financing needs
US$ bn
19.7
19.8
22.9
18.1
19.9
Merchandise exports
US$ bn
23.3
26.4
26.7
27.2
31.3
Merchandise imports
US$ bn
24.1
23.9
19.1
11.7
12.8
Trade balance
US$ bn
-0.8
2.5
7.6
15.5
18.5
Current account balance*
US$ bn
-12.0
-9.0
-4.4
5.7
8.0
EXTERNAL SECTOR
Current account balance*
% GDP
-4.2
-3.1
-1.6
5.8
8.3
Net direct investment
US$ bn
11.1
10.6
4.1
-1.5
-1.0
Foreign exchange reserves, year-end
US$ bn
32.2
32.5
19.4
9.0
11.0
Import cover **
months
8.3
8.1
5.7
3.6
4.1
US$ exchange rate, year-end
Pesos
1.0
1.0
1.0
4.5
5.5
US$ exchange rate, average
Pesos
1.0
1.0
1.0
3.5
5.1
145.3
146.3
139.8
144.3
149.6
429
381
383
407
372
FOREIGN DEBT
Gross foreign debt*
US$ bn
Foreign debt*
% exports**
Short-term foreign debt*
US$ bn
20.0
22.8
16.8
13.4
15.3
Foreign debt amortization*
US$ bn
12.9
16.0
17.2
13.0
13.3
Foreign debt service*
US$ bn
23.7
28.5
29.3
25.3
26.0
Foreign debt service*
% exports**
70
74
80
71
65
11.5
13.8
54.9
60.0
30.0
FINANCIAL MARKETS (year-end)
Prime rate (peso 30 days)
%
Merval stock index (peso based, 2002: 05/27)
IFCI stock index (US$ based, 2002: 05/27)
Bond market yield spread (2002: 05/27)***
bps
549
417
209
322
1064
797
379
184
533
773
4404
5720
* without rescheduling **goods and services *** EMBI+
Dresdner Bank Lateinamerika, Spotlight 6/2002, Argentina
f=forecast
7
SHARE OF PUBLIC BUDGET DEFICIT
Domestic policy: Duhalde out of his depth
President Duhalde, elected by Congress four months ago, thus far
other
Provinces
17%
Province of
Buenos Aires
16%
has not managed to change course. Absolutely essential measures
such as the streamlining of the banking sector and cutting expenditure
are being postponed as Duhalde neither has the necessary power
base nor the necessary credibility to call for further sacrifices to be
made by the population. In addition, Duhalde has obviously still not
abandoned his inclination toward dirigisme. In the past, however, his
Central
Government
67%
aides have managed to convince him that the return to a fixed exchange
rate, for instance, or the imposition of price controls are not the solution.
Whether this will continue to be the case in the future is at least
questionable since a further intensification of the crisis is looming,
which might induce more substantial dirigistic interventions.
On account of the Duhalde government’s lack of success, the likelihood
of fresh elections is growing. The fact remains, however, that new
elections hold little promise of an improvement. The population
EVOLUTION OF TAX REVENUES
opposes practically all politicians from the establishment. A limited
degree of approval is being received only by protest movements such
%, yoy
20
as the ARI (Argentinos por una República de Iguales) led by Elisa
Carrio. However, this movement derives its profile primarily from its
10
criticism of the corrupt political system and so far has had little to offer
0
by way of competence in terms of economic policy.
-10
Public finance: hard struggle to reach IMF agreement
-20
As expected, the negotiations with the IMF are proving to be difficult.
Without any advance concessions and binding assurances from the
-30
Jan-00
Aug-00
Mar-01
Oct-01
Apr-02
provinces, the IMF will not be prepared to sign a new agreement. The
Argentinean government and the provinces, in turn, see little leeway
for spending cuts due to the tense social situation. In particular, the
province of Buenos Aires, which last year accounted for half of the
accumulated financing deficit of the provinces, does not see itself in a
position to reduce its budget deficit by the required 60% and to stop its
AMORTIZATION TO MULTILATERALS
issue of quasi-money.
US$ bn
3.0
Even if there should be an agreement in the next months, we do not
anticipate that an extensive level of fresh funding will be made available.
2.5
For the time being, the primary likely will be to service loans falling due
2.0
to multilateral financial institutions (2002: US$ 9.4 billion), which are to
1.5
continue to be serviced. In order to avoid a default in the repayment of
1.0
loans to the World Bank, early in May this year Argentina made an
amortization payment of US$ 680 million from its foreign currency
0.5
reserves. Presumably to prevent a further meltdown of constantly falling
0.0
Oct-01
Jan-02
Apr-02
Jul-02
Sep-02
currency reserves (see chart), the IMF subsequently, at end-May 2002,
prolonged US$ 136 million in debt falling due by one year.
8
Dresdner Bank Lateinamerika, Spotlight 6/2002, Argentina
CURRENCY RESERVES
Monetary policy: on the road to hyperinflation?
Consumer prices saw a marked acceleration in April at 10.4% monthon-month (18.5% year-on-year). Since the beginning of the year, the
US$ bn
15
cost of living has thus risen by 21%. Prices of basic foodstuffs in the
basket of goods rose by as much as 42%. The signs of a further
significant price rise are giving cause for concern. The increase in the
value of the US$ (250 % since the beginning of the year) is likely to
14
13
12
cause substantial inflationary pressure in months to come even though
the strong contraction of imports (first quarter: -64 %, year-on-year) is
11
softening the impact. The wholesale price index, which is more strongly
10
dependent on tradable goods, rose by as much as 19% in April month-
World Bank
amortization
Feb 02
Mar 02
Apr 02
May 02
on month (53% year-on-year). Despite the high level of unemployment,
the wage-price spiral is likely to gain momentum soon. In view of a
shortfall in real wages of families of just under 50% in the past three
years and the current rise in inflation, wage hikes are inevitable,
especially since the influence of the trade unions within the government
INFLATION
has been strengthened by the latest instances of the cabinet being
reshuffled.
%, yoy
CPI
WPI
60
The price rise is being fueled by what appears to be uncontrolled
issuing activity on the part of the central bank and the provinces (to
finance the outflow of deposits and the budget deficits). The central
50
40
bank has issued 5 billion pesos – already 1.5 billion pesos more than
30
planned for the year as a whole. Among other things, this became
20
necessary as the level of “frozen” deposits continues to decline due
10
to court decisions being handed down in favor of savers. In addition,
0
the provinces unabatedly continue to issue numerous quasi-
-10
currencies. Assuming that it will be possible to bring the country’s
Apr-01
Jun-01
Aug-01
Oct-01
Dec-01
Feb-02
Apr-02
monetary policy back on a sound course in the next few months, we
have only raised our forecast for the 2002 inflation rate to 80% (Dec.,
year-on-year).
Financial sector: central bank and the government at loggerheads
A solution to the deep-seated crisis in the banking sector continues to
be out of sight. In order to prevent a flight into the US$, the lion’s share
of bank deposits remains frozen. The plan (which has become known
INDUSTRIAL PRODUCTION
%, yoy
8
4
as BONEX II) of compulsory swaps of these deposits for government
0
bonds has failed due to resistance from the opposition and the
-4
protesting savers. The ministry of economy then proposed a voluntary
-8
swap of time deposits for government bonds, accompanied by a
-12
simultaneous de-freezing of demand deposits. This was to be financed
by 17 billion pesos in issues by the central bank. Owing to the
associated risks of inflation, the central bank is correct in rejecting this
-16
-20
-24
Feb-00
Sep-00
Apr-01
Nov-01
Apr-02
approach. In the wake of a number of resignations by central bank
Dresdner Bank Lateinamerika, Spotlight 6/2002, Argentina
9
directors, it was very difficult to persuade central bank president Blejer
GDP CHANGE (REAL)
(one of the few decision-makers with international recognition) not to
%, quarterly, yoy
follow suit. We expect that there will be a compromise between the
2
ministry and the central bank; however, this may lead to even more
banks having to close down.
-3
Economic activity: a long, hard haul
-8
The latest information on industrial production continues to reflect (and
this is hardly surprising) an extremely negative tendency compared
-13
with the previous year (April: -12.4%, year-on-year). We do not perceive
-18
I/99
IV/99
III/00
II/01
I/02f
IV/02f
the seasonally adjusted increase (April: +3.5% month-on-month) as
an initial sign of a trend reversal. Instead, we assume that aggregate
economic output will remain at its very low level longer than originally
anticipated. Factors to support this view in particular have been the
uncertainty triggered by the lack of direction in terms of economic
policy and the banking crisis that continues to prevail. We have revised
EXTERNAL TRADE
our growth forecast for 2002 downward from –10% to –13%.
%, y-o-y, 3-month moving average
40
External sector: exchange rate remains under pressure
Since the beginning of the year, the peso has depreciated by just over
exports
20
70%. However, the exchange-rate level of 3.5 pesos/US$ currently
0
reached still does not represent a rate in conformity with the market.
-20
Each step in the direction of a partial de-freezing of the 15-20 billion
-40
pesos in bank balances would immediately lead to an increase in
imports
demand for US dollars. To conserve the country’s foreign currency
-60
reserves, the central bank is continuing its efforts to reduce the supply
-80
Jun-99
Mar-00
Dec-00
Sep-01
Mrz-02
of US dollars available. In mid-May upper limits were imposed on daily
forex operations of banks and exchange houses. The system accepted
by the majority of commercial banks for several weeks now, in terms of
which they guarantee a reference rate fixed by the central bank on a
daily basis for public dealings and are supplied with foreign currency
by the central bank in return, does not appear to have been feasible in
EXCHANGE RATE
the long run. What is foreseeable is that the settlement of payment
Pesos/US$
commitments abroad will call for even longer processing times and
4.00
the black market will prosper. Export revenues, which in March (+3%
year-on-year) rose for the first time again since October 2001, are
3.00
being exchanged too slowly for local currency according to the central
bank; thus, it now requires exporters to exchange their foreign-currency
2.00
proceeds within 120 days.
1.00
0.00
Jan 02
10
Feb 02
Mar 02
Apr 02
May 02
Günter Köhne +49 40 3595 3484
Dresdner Bank Lateinamerika, Spotlight 6/2002, Argentina
MONTHLY AND QUARTERLY FIGURES
ARGENTINA: MONTHLY INDICATORS
Jan-02
Feb-02
Mar 02
Apr-02
next/latest
DOMESTIC ECONOMY
Industrial production
% yoy
-19.0
-15.3
-20.2
-12.
12.4
Construction
% yoy
-43.8
-42.8
-37.1
- 35.
35.6
25-Jun
Supermarket sales
% yoy
-7
-3
2
-2
-2.5
25-Jun
Budget balance
18-Jun
US$ mn
-439
-654
-1425
Consumer prices
% yoy
0.6
4.0
7.9
18.
18.4
5-Jun
Consumer prices
% mom
2.3
3.1
4.0
10.4
10.
5-Jun
102.
102.5
90.0
Overnight peso rate (month-end; latest: 05/08)
29-May
%
n.a.
n.a.
85.0
Private sector borrowing (month-end)
Peso bn
49.2
47.8
46.2
Public sector borrowing (month-end)
Peso bn
30.0
29.7
29.4
Peso deposits (month-end; latest: 05/24)*
Peso bn
23.0
37.4
49.8
61.0
59.
59.5
US$ bn
37.5
24.8
14.4
2.1
0.
0.9
Merchandise exports
US$ mn
1832
1822
2075
31-May
Merchandise exports
% yoy
-11
-1
3
31-May
US$ mn
853
627
592
31-May
% yoy
-56
-64
-7
-71
31-May
Trade balance
US$ mn
979
1195
1483
31-May
Foreign exchange reserves (latest: 05/24)***
US$ bn
19.6
13.9
12.8
12.2
10.5
10.
Pesos
1.94
2.11
2.93
2.96
3.
3.42
42
Q1 01
Q2 01
Q3 01
Q4 01
next /latest
US$ deposits (latest: 05/24)*
EXTERNAL SECTOR
Merchandise imports, cif
Merchandise imports
US$ exchange rate (latest: 05/24)
ARGENTINA: QUARTERLY INDICATORS
DOMESTIC ECONOMY
GDP
% yoy
-2.0
-0.2
-4.9
-10.7
20-Jun
Private consumption
% yoy
-1.8
-2.1
-6.6
-12.3
20-Jun
Public consumption
% yoy
0.5
0.4
-2.1
-6.5
20-Jun
Private and public investment
% yoy
-9.5
-6.2
-17.2
-29.4
20-Jun
Domestic demand
% yoy
-2.0
-1.2
-7.8
-14.7
20-Jun
Export (goods and services)
% yoy
0.7
4.6
5.7
0.1
20-Jun
20-Jun
Import (goods and services)
% yoy
0.8
-4.2
-17.9
-33.8
Pesos mn
-3017
-2189
-802
-2713
-2518
US$ bn
127.4
132.2
141.2
144.5
27-Jun
Current account balance
US$ bn
-3.1
-1.1
-0.7
0.4
27-Jun
Net foreign direct investment
US$ bn
1.7
1.2
0.8
0.3
27-Jun
Net portfolio investment
US$ bn
2.2
1.1
-1.5
-1.6
27-Jun
Budget balance, central government
Public debt
EXTERNAL SECTOR
Capital account**
US$ bn
0.6
0.8
0.2
-5.7
27-Jun
Change in foreign reserves
US$ bn
-3.7
-1.7
-4.0
-4.7
-7.1
Gross foreign debt
US$ bn
145.6
142.4
146.9
139.8
27-Jun
Short-term foreign debt
US$ bn
23.2
21.9
20.9
16.8
27-Jun
* bank deposits of private sector; ** incl. residual items; *** new calculation system since Feb02
Dresdner Bank Lateinamerika, Spotlight 6/2002, Argentina
11
BRAZIL: LULA ANTE PORTAS?
Area
Population
8 511 965 sq. km
172 million (+1.4% p.a.)
State president
Finance minister
Central bank president
Fernando Henrique Cardoso
Pedro Malan
Armínio Fraga
Next elections
State president: October 2002
Parliament: October 2002
GDP per capita
US$ 2 940 (2001)
Investment
Savings
19% of GDP (2000)
17% of GDP (2000)
Exchange rate system
Monetary policy
Flexible exchange rate
Inflation targeting
Exports (2001)
Purchasing countries
Products
12% of GDP
EU 26%, USA 25%, ALADI 21%, Asia 12%
Manufactured goods 71%,
Primary products 26%
Imports (2001)
Supplier countries
Products
11% of GDP
EU 27%, USA 24%, ALADI 18%, Asia 16%
Primary products 50%, capital goods 27%
consumer goods 13%, crude oil 11%,
Rating:
Moody’s: B1
S&P: BB-
SUMMARY AND OUTLOOK
The increasing popularity of the left-of-center presidential candidate according to the latest opinion polls on the forthcoming
election (over 40%) has dimmed the general sentiment toward Brazil on the financial markets. Many investors fear that in
future the previous stability-oriented economic policy might be abandoned in favor of a populist approach. The risk
premiums for Brazilian securities increased and the exchange rate weakened, contributing to the currently high level of
inflation (approx. 8% year-on-year). Accordingly, in spite of the present decrease in industrial production and domestic
demand, the central bank left the basic interest rate (Selic) at 18.5% in May. The slight increase in global trade and the
Argentinean crisis, which were detrimental to the expansion of Brazilian exports, as well as the uncertainty in connection
with the presidential election scheduled for October led to a GDP decline of 0.7% in the first quarter of this year. For this
reason, we have lowered our growth forecast for the year 2002 as a whole from 2.5% to 2.1%.
12
Dresdner Bank Lateinamerika, Spotlight 6/2002, Brazil
ANNUAL FIGURES AND FORECASTS
BRAZIL
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
0.8
4.4
1.5
2.1
3.7
529.4
593.8
505.1
531.2
546.4
Inflation (year-end)
Inflation (average)
%
8.9
6.0
7.7
5.5
4.2
%
4.9
7.0
6.8
7.0
4.5
-2.7
-1.5
-1.5
-1.5
-1.5
PUBLIC SECTOR
Budget balance, central government
% GDP
Budget balance, public sector
% GDP
-5.9
-3.7
-3.6
-3.6
-3.6
Public debt
% GDP
49.4
49.5
53.3
54.0
53.5
Amortization external debt
US$ bn
n.v.
n.v.
n.v.
7.3
7.5
Amortization domestic federal debt*
Reais bn
n.v.
n.v.
197.0
155.0
160.0
EXTERNAL SECTOR
Merchandise exports
US$ bn
48.0
55.1
58.2
59.1
66.1
Merchandise imports
US$ bn
49.3
55.8
55.6
54.9
61.4
Trade balance
US$ bn
-1.3
-0.7
2.6
4.3
4.7
Current account balance
US$ bn
-25.3
-24.7
-23.2
-20.5
-19.8
Current account balance
% GDP
-4.8
-4.1
-4.6
-3.9
-3.6
Net foreign direct investment
US$ bn
28.6
32.8
22.6
17.5
18.0
Foreign exchange reserves, year-end
US$ bn
34.8
32.5
36.0
34.0
35.0
Import cover **
months
4.8
4.1
4.5
4.3
4.1
US$ exchange rate, year-end
Reais
1.84
1.96
2.32
2.50
2.61
US$ exchange rate, average
Reais
1.82
1.83
2.33
2.42
2.55
225.6
216.9
209.9
212.6
213.1
382
319
296
291
260
FOREIGN DEBT
Gross foreign debt
US$ bn
Foreign debt
% exports**
Short-term foreign debt
US$ bn
26.6
27.4
27.6
29.0
29.0
Foreign debt amortization
US$ bn
44.3
25.8
31.6
32.0
32.0
Foreign debt service
US$ bn
59.5
42.9
49.2
50.0
50.0
Foreign debt service
% exports**
101
63
70
68
61
%
18.8
15.8
19.0
17.0
15.0
17091
15258
13577
12698
459
411
288
305
636
749
870
982
FINANCIAL MARKETS (year-end)
Interbank interest rate, overnight
Bovespa stock index (real based, 2002: 05/27)
IFCI stock index (US$ based, 2002: 05/27)
Bond market yield spread ( 2002: 05/27)***
bp
* incl. short term debt ** goods and services *** EMBI+
Dresdner Bank Lateinamerika, Spotlight 6/2002, Brazil
f=forecast
13
VOTING INTENTIONS
Domestic policy: Lula has not won yet
Sep-01 Dec-01 Mar-02 Apr-02 May-02
Lula (PT)
30%
Serra (PSDB)
31%
24%
35%
38%
6%
5%
16%
18%
16%
Garotinho (PSB)
10%
9%
14%
17%
16%
Ciro (PPS)
12%
10%
6%
11%
10%
Roseana (PFL)
12%
16%
13%
0%
0%
Itamar (PMDB)
10%
7%
4%
0%
0%
Other / null /
undecided
20%
22%
23%
19%
20%
Source: Ibope/CNI
Candidates
Parties´ Alliances
Jose Serra
PSDB+PMDB
Ciro Gomes
PPS+PDT+PTB
Lula
PT
Anthony Garoti PSB
Others
Total
% of
Total Time
21
8
8
4
9
50
42%
16%
16%
8%
18%
100%
US$
fixed rate
events and affairs to change the positioning of the individual candidates. Lula’s step forward came about on account of allegations of
corruption against a former Serra election aide, among other factors.
Moreover, Lula has had a greater presence on the radio and television
will mean that Serra will have about 20 minutes of the free minutes
available each day for his propaganda, or more than twice as many as
Lula. In this decisive phase, therefore, Serra will not only have more
time to present his ideas in detail, but will also criticize the programs
gradually taking shape among his rivals – with a strong influence on the
undecided voters who, according to the Brazilian public opinion research institutes, still represent two-thirds of the electorate.
In our view, the election program of the PT (”Ruptura Necessária” =
necessary breach) contains several contradictions. The economic
policy concept described in it is based on a sharp and speedy interest
rate cut intended to relieve public finances and accordingly create
additional leeway for raising public spending in the process. In order to
achieve this, among other things the party anticipates a just as speedy
reduction of the country’s external vulnerability (drastic reduction of the
country’s current account deficit) by means of export growth and import
INTERNAL DEBT STRUCTURE
share in %
80
to emphasize that at this relative early stage of the election campaign,
opinion polls can say precious little about the actual outcome of the
elections and that the latter have by no means already been decided. In
the four months leading up to the elections, there will be many factors,
than Serra (candidates are free to spread the advertising minutes allocated to each in commercial television over a fixed period of time).
Starting in August, the broadcast time available will be allocated to the
candidates in proportion to the distribution of seats in parliament. This
BROADCASTING TIME OF CANDIDATES
Total
Minutes
In view of the improved popularity ratings of opposition candidate Lula
of the Workers’ Party (PT) in recent opinion polls (a similar situation as
prior to previous elections) and the associated deterioration of the Brazilian risk on account of political uncertainty, we consider it appropriate
floating rate
60
substitution, but which can only be achieved in the medium to long
term. If Lula wins the election, though, the additional uncertainty associated with his victory on the financial markets is more likely to lead to
interest rate hikes and, therefore, to more significant economic difficulties. We consider it probable that these contradictions will be more
clearly discernible during the decisive phase of the election campaign
and that Lula’s approval ratings will decline, which should improve the
prospects of the candidate from the ruling coalition.
40
20
0
Oct-99
14
Apr-00
Oct-00
Apr-01
Oct-01
Apr-02
Dresdner Bank Lateinamerika, Spotlight 6/2002, Brazil
PUBLIC SECTOR BALANCE
Public finance: target to be maintained despite the risks involved
The decline of the primary surplus in the consolidated public-sector
budget in March and the further delay in the passage of the financial
transactions tax (CPMF; estimated shortfall in revenues in 2002 approx.
R$ 5 to 6 billion) raised doubts as to whether the 3.5% primary surplus
target agreed with the IMF would be met. As the results for April have
shown – record surplus of R$ 9 billion – the lower primary surplus of
March was no trend reversal but was largely attributable to temporary
losses of the state-owned oil company Petrobrás. The government continues to adhere unabated to its austerity policy. In order to offset the
anticipated shortfall of the CPMF tax, the government has already announced tax increases and budget cuts totaling some R$ 5 billion.
Despite the primary surplus, the country’s net domestic debt in April
% of GDP, moving 12 months period
the other hand, the central bank has been successful in recent months
in its efforts to improve the structure of the country’s domestic debt. The
proportion of total public-sector foreign debt accounted for by fixedincome securities increased substantially from 7.5% in February to just
under 10% in April. The average lifetime of public internal debt improved slightly, to 35.6 months (December 2001: 35 months).
primary
4
2
0
-2
-4
-6
-8
Apr-99
Oct-99
rose to R$ 685 billion (54.5% of GDP), which is predominantly attributable to the effects of the real’s depreciation on the portfolio of US$denominated securities (R$ 183 billion). In view of the prevailing uncertainty, which is weakening the exchange rate and delaying interest rate
cuts, and the temporary high volume of US$-denominated bonds maturing (R$ 27.5 billion in the second quarter) we only anticipate an
improvement in the debt situation thanks to GDP growth, lower interest
rates and a more stable exchange rate starting in the third quarter. On
nominal
Apr-00
Oct-00
Apr-01
Oct-01
Apr-02
INDUSTRIAL PRODUCTION
%, real
20
12-months accumulated change
yoy
15
10
5
0
-5
-10
Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02
Economic activity: GDP decline
In the first quarter of 2002, GDP declined 0.7% year-on-year, with the
increases in agriculture (+4.4%) and in the services sector (+1.7%) not
being enough to offset the reduction in industrial production (-3.9%).
The poor figures are also being reflected on the demand side. In our
assessment, private consumer demand has only risen slightly, and the
level of investment has declined. This is also matched by a decline in
lending in real terms, by approx. 8%. The causes of this are likely to be
the ongoing high level of interest rates and the uncertainty in the run-up
to the presidential election. In mid-2002 we anticipate that the economy
will benefit from stronger impetus generated by the combination of domestic and external economic factors, which are likely to cause GDP
growth to accelerate in the third quarter. Owing to the weak development in the first semester, we have revised our GDP growth forecast
downward from 2.5% to 2.1%.
Dresdner Bank Lateinamerika, Spotlight 6/2002, Brazil
INFLATION
%
10
yoy
mom
9
8
7
6
5
4
3
2
1
0
Apr-99
Oct-99
Apr-00
Oct-00
Apr-01
Oct-01
Apr-02
15
Monetary sector: delay in interest rate cut
Despite the current weakness in economic activity, at its monthly ses-
INTEREST RATE
sion the central bank also left the basic interest rate (Selic) unchanged
in May. As a result, since March it has been at 18.5%, or only 0.5 of a
percentage point below the level at the beginning of this year. Since
the inflation rate (IPCA April 2002: 8% year-on-year) remains signifi-
interbank overnight %, annualized rate
50
45
40
35
cantly higher than the target corridor of 1.5% to 5.5% (year-on-year)
agreed for end-2002 and as the spreads and exchange rate (depreciation of the real since the beginning of the year to end-May: 9%)
have been highly volatile recently, the central bankers have decided
30
25
20
15
10
Nov-98 May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02
further). Moreover, the current trend of falling food prices is likely to
contribute to a decline in monthly inflation rates to approx. 0.4% and
the annualized rate to 5.4% in December. Accordingly, we anticipate
that there will be room for maneuver again for interest rate cuts in the
EXCHANGE RATE
Reais/US$
course of the year. A precondition for this is that a devaluation spiral
can be avoided, which is what we assume will be the case. At year-end
we expect the real to be in the region of 2.50 reais/US$, which is also
in line with the level of the past few weeks. We have raised our interest
3.0
2.8
2.6
rate forecast for the end of the year from 16% to 17%.
2.4
External sector: decline in imports resulting in trade surplus
Even though Brazil’s exports fell by 11% in the first four months of 2002
2.2
May-01
Aug-01
Nov-01
Feb-02
May-02
US$ bn
36
current account deficit
FDI
(moving twelve months period)
to lowering the current account deficit from US$ 9 billion in the first four
months of 2001 to US$ 5.2 billion in the same period this year. The net
inflow of direct investment from abroad, which at US$ 6.7 billion was
considerably higher, and capital inflows from foreign bond issues in
32
28
24
April reinforced the country’s foreign currency reserves to such an
extent that the central bank prematurely repaid US$ 4 billion in IMF
credits.
20
16
Apr-00
year-on-year as a result of low commodity prices, the Argentinean
crisis (decline in exports to Argentina January-April: 68%) and the
slowdown in world trade, the trade balance registered increasing surpluses (January-April: +US$ 1.5 billion). This swing into positive territory occurred on the basis of a sharp fall in imports, which dropped by
21% in the period under review. The sharp decline in imports reflects
the low level of industrial production as well as the absence of purchases abroad on account of the exchange-rate related higher prices
of imported goods. The trade surplus made a substantial contribution
CURRENT ACCOUNT & FDI
16
to opt for a cautious approach. The relatively high monthly inflation
rate of April (0.8%) was essentially attributable to fuel price hikes, which
will probably turn out significantly lower or fail to eventuate in the course
of the year (our view is that international oil prices will not rise any
Aug-00
Dec-00
Apr-01
Aug-01
Dec-01
Apr-02
Humberto Santamaria, São Paulo +55 11 5188 6884
Dresdner Bank Lateinamerika, Spotlight 6/2002, Brazil
MONTHLY AND QUARTERLY FIGURES
BRAZIL: MONTHLY INDICATORS
Jan-02
Feb-02
Mar 02
Apr-02
next/latest
DOMESTIC ECONOMY
Public sector primary balance
% of GDP
5.3
3.2
3.0
8.6
27-Jun
Reais bn
29.7
32.2
15.1
18.0
14-Jun
Capacity utilization (CNI)
% yoy
78.8
79.1
80.7
7-Jun
Industrial production (IBGE)
% yoy
-1.3
-1.4
-3.8
7-Jun
Retail sales (FCESP)
% yoy
-5.5
-7.2
-1.5
%
6.8
7.0
7.1
Central government tax revenues
Unemployment rate (IBGE)
3-Jun
7.6
26-Jun
Real wages per working hour (FIESP)
% yoy
4.7
5.3
6.2
Consumer prices
% yoy
7.6
7.5
7.8
8.0
13-Jun
Consumer prices
% mom
0.5
0.4
0.6
0.8
13-Jun
Money supply M1
% yoy
11.7
8.0
10.4
%
19.1
18.8
18.5
% yoy
4.5
2.1
-0.1
Interbank interest rate (latest: 05/27)*
Financial sector lending
3-Jun
28-May
18.1
18.4
28-May
EXTERNAL SECTOR
Merchandise exports
US$ mn
3972
3658
4260
4641
3-Jun
Merchandise exports
% yoy
-12.5
-10.4
-17.6
-1.9
3-Jun
Merchandise imports
US$ mn
3797
3399
3666
4160
3-Jun
Merchandise imports
% yoy
-24.3
-15.2
-32.7
-9.7
3-Jun
Trade balance
US$ mn
175
259
594
481
3-Jun
Current account balance
US$ mn
-1144
-1090
-997
-1983
25-Jun
Net foreign direct investment
US$ mn
1477
856
2366
1964
25-Jun
Foreign exchange reserves (latest:05/27)*
US$ bn
36.2
35.9
36.7
33.0
32.8
Reais
2.41
2.36
2.33
2.36
2.53
Q2 01
Q3 01
Q4 01
Q1 02
-0.7
US$ exchange rate (latest: 05/27)*
BRAZIL: QUARTERLY INDICATORS
next/latest
DOMESTIC ECONOMY
GDP
% yoy
2.1
0.5
-0.7
Private consumption
% yoy
3.0
-3.3
-3.3
Public consumption
% yoy
2.2
1.6
1.4
27-Jun
Private and public investment
% yoy
2.8
1.7
-7.5
27-Jun
Agriculture
% yoy
3.2
3.3
9.9
4.4
30-Aug
Industry
% yoy
0.4
-2.0
-5.5
-3.9
30-Aug
Services
% yoy
3.1
2.1
1.8
1.7
30-Aug
Reais bn
619.4
671.9
660.9
680.7
25-Jul
Current account balance
US$ bn
-6.7
-4.1
-5.8
-3.2
24-Jul
Net foreign direct investment
US$ bn
5.2
5.4
7.4
4.7
24-Jul
Portfolio investment
US$ bn
-0.7
1.7
3.3
2.9
24-Jul
Capital account **
US$ bn
9.6
10.7
3.1
4.4
24-Jul
Change in foreign exchange reserves
US$ bn
2.9
2.7
-4.2
0.9
Gross foreign debt
US$ bn
207.8
216.5
209.9
25-Jun
US$ bn
26.9
27.1
27.6
25-Jun
Public debt
30-Aug
27-Jun
EXTERNAL SECTOR
Short-term foreign debt
* month-end
24-Jul
** incl. residual items
Dresdner Bank Lateinamerika, Spotlight 6/2002, Brazil
17
CHILE: EU AGREEMENT SIGNED, SEALED AND DELIVERED
Area
Population
756 629 sq. km
15.2 million (+1.2% p.a.)
State president
Finance minister
Central bank president
Ricardo Lagos Escobar
Nicolás Eyzaguirre Guzmán
Carlos Massad Abud
Next elections
State president: December 2005
Upper House: December 2005
Lower House: December 2005
GDP per capita
US$ 4 250 (2001)
Investment
Savings
22% of GDP (2000)
25% of GDP (2000)
Exchange rate system
Monetary policy
Flexible exchange rate
Inflation targeting
Exports (2001)
Purchasing countries
Products
28% of GDP
EU 27%, USA 19%, Japan 12%
Industry 47%, Mining 46%
Fishing, Agriculture, Forestry 9%
Imports (2001)
Supplier countries
Products
25% of GDP
EU 20%, Argentina 19%, USA 18%
Capital goods 23%, consumer goods 20%,
fuel and lubricants 16%
Rating:
Moody’s: Baa1
S&P: A-
SUMMARY AND OUTLOOK
In a poor environment on the whole (the Argentinean crisis, low commodity prices and a weak global economy), in the
first quarter economic growth in Chile continued to slow down. Production in key sectors (mining, industry, construction)
is stagnating or declining. On the other hand, there are some signs of economic revitalization. This applies particularly
to sales of industrial consumer goods, which have climbed in recent months thanks to real increases in exports and
rising consumer demand. Employment has also grown year-on-year. A further bright spot is the trade agreement with
the EU signed in May. Free access for a wide range of goods from the agricultural and fishing sector is likely to give
exports to the EU a substantial boost in the next several years. We also expect a boost in the level of direct investment
from the EU.
18
Dresdner Bank Lateinamerika, Spotlight 6/2002, Chile
ANNUAL FIGURES AND FORECASTS
CHILE
1999
2000
2001
2002f
2003f
%
-1.0
4.4
2.8
2.8
4.5
GDP
US$ bn
73.0
74.9
66.4
66.8
71.6
Inflation (year-end)
%
2.3
4.5
2.6
3.6
3.6
Inflation (average)
%
3.3
3.8
3.6
2.6
3.8
-0.5
DOMESTIC ECONOMY
GDP change (real)
PUBLIC SECTOR
Budget balance, central government
% GDP
-1.3
0.3
-0.3
-0.7
Budget balance, public sector
% GDP
-1.6
-0.6
-1.5
-1.4
-1.3
Public debt
% GDP
15.0
14.8
13.7
14.0
14,2
Amortization ***
US$ bn
0.4
0.6
1.2
0.8
0.9
Merchandise exports
US$ bn
17.2
19.2
18.5
19.3
20.8
Merchandise imports
US$ bn
14.7
17.1
16.4
17.1
18.4
EXTERNAL SECTOR
Trade balance
US$ bn
2.5
2.2
2.1
2.2
2.4
Current account balance
US$ bn
-0.3
-1.1
-1.2
-1.7
-1.1
Current account balance
% GDP
-0.4
-1.4
-1.9
-2.5
-1.6
Net foreign direct investment
US$ bn
4.4
-1.102
0.7
1.5
2.4
Foreign exchange reserves, year-end
US$ bn
14.7
14.7
14.2
14.4
14.9
Import cover **
months
7.9
7
6.8
6.5
6.3
US$ exchange rate, year-end
Pesos
530
574
661
668
685
US$ exchange rate, average
Pesos
509
540
635
667
674
Gross foreign debt
US$ bn
34.2
36.8
37.8
38.0
38.5
Foreign debt
% exports**
159
152
161
155
145
FOREIGN DEBT
Short-term foreign debt
US$ bn
1.2
2.5
2.1
2.0
2.5
Foreign debt amortization
US$ bn
2.8
2.9
4.4
4.4
4.2
Foreign debt service
US$ bn
4.4
4.8
6.2
5.8
6.1
Foreign debt service
% exports**
21
20
27
24
24
10.7
8.5
6.2
5.0
6.5
FINANCIAL MARKETS (year-end)
Base rate, 90 days (PDBC)
% real
IPSA stock index (peso based, 2002: 05/27)
100
96
113
95
IFCI stock index (US$ based, 2002: 05/27)
613
520
479
462
152
221
180
144
Bond market yield spread (2002: 05/27)*
7/8
*6
% US$-Bond (2009)
bp
**goods and services
*** excl. domestic debt
Dresdner Bank Lateinamerika, Spotlight 6/2002, Chile
f=forecast
19
ECONOMIC ACTIVITY
Economic policy: social sector reforms
In mid-May the government launched a health reform (Plan Auge:
IMACEC index, % yoy
„Acceso Universal con Garantías explicitas en salud“) and a plan
8
to alleviate poverty („Chile solidario“). Together, both projects are
6
to cost around US$ 350 million. The financing is to be effected
4
following higher growth and increased tax receipts in the years
2
2003 and 2004, by a tobacco and mineral oil tax hike as well as
public-sector budget adjustments. Not surprisingly, therefore, the
0
government’s plans are highly controversial. However, in our opinion improved access to health services does not only appear desir-
-2
Sep-99
Mar-00
Sep-00
Mar-01
Sep-01
Mar-02
able in light of social aspects but is also a key measure in macroeconomic terms, in order to increase the country’s productivity on a
long-term basis.
Public finance: budget deficit set to rise
In the first quarter of this year, revenues fell by 3.4% (year-on-year)
LABOR MARKET
amid a stagnation in tax receipts in real terms. In contrast, expendi2e
Unemployment rate (%)
Number of employed (mn)
ture rose by 8% in real terms, due among other factors to a substan-
14
5.6
tial increase in public-sector investment (+22% year-on-year). The
12
5.5
budget deficit in this period amounted to 0.9% of GDP. In the inter-
5.4
ests of a structural budget target, the government has embarked on
5.3
an anti-cyclical fiscal policy: within the scope of this concept a
5.2
budget surplus of 1% of GDP has been targeted in case the copper
10
8
6
4
2
5.1
0
5.0
price and the level of growth are within the (estimated) long-term
bandwidth. Since growth has turned out significantly lower and the
Mar-99
Sep-99
Mar-00
Sep-00
Mar-01
Sep-01
Mar-02
Page 1
copper price is below the estimated average, a budget deficit is
“permissible”. We assume that this policy will continue in principle
in the forthcoming months, but we anticipate that the government
will adopt countermeasures once the deficit is likely to turn out
substantially higher than 1% of GDP: signals of the country’s hitherto very solid fiscal policy softening could lead to a loss of confi-
INFLATION (CPI)
%
dence among international investors and, accordingly, to higher
y-o-y
m-o-m
financing costs on the international financial markets. Chilean
6
spreads currently are at a low level (approx. 150 basis points).
5
4
Economic activity: passing through the valley
3
In the first quarter, growth of the Chilean economy continued to
2
slow down to 1.5% year-on-year. Even if this modest figure is partly
1
attributable to the effect of the long Easter weekend (fewer working
0
days in the first quarter), the overall picture indicates stagnation.
-1
Apr-00
20
Oct-00
Apr-01
Oct-01
Apr-02
The mining sector (9% of GDP) made a major contribution to this
Dresdner Bank Lateinamerika, Spotlight 6/2002, Chile
INTEREST RATES
poor result with a production shortfall of 0.5%. In the industrial sector (16% of GDP), it was possible to generate a growth rate of only
0.4%. Growth rates were also very low in commerce and in the
financial sector. Viewed from the demand side, however, there are
signs pointing in the direction of a slight revitalization. For instance,
sales of industrial consumer goods as well as new automobiles
have risen in recent months. This is likely to be attributable to higher
%
16
14
12
10
8
6
employment figures (+2.3% for January-March compared with
4
December-February) as well as real wage increases. Moreover,
2
since end- 2001 various indices of consumer confidence (e.g.
0
ADIMARK and the Index of the Universidad de Chile) point to en-
PDBC, 90 days
Jan-00
Oct-00
Jul-01
Apr-02
hanced optimism. This is matched by the observation that the average duration of unemployment has decreased. In addition, sales of
goods have been observed to be stimulated above all by demand
from abroad (exports in the first quarter: +6% in real terms).
On the whole, we assume that the economy is likely to have bot-
EXTERNAL SECTOR
tomed out in the second quarter, followed by a moderate recovery,
which means that a growth rate of 2.8% (previously: 3.4%) might be
US$ mn
exports
imports
balance
2000
achievable. This forecast is based on expectations of a slight revitalization of global economic activity and an ongoing expansion-
1500
ary fiscal policy.
1000
Monetary sector: further interest rate cut
500
In mid-May the central bank lowered its key interest rate yet again,
0
namely from 4.75% to 4% (early 2002: 6.5%). This occurred against
-500
the backdrop of an ongoing low inflation rate (CPI April: 2.5% year-
Oct-00
Apr-01
Oct-01
Apr-02
on-year) and weak domestic demand. At the same time, the domestic level of interest rates will tend to be adjusted to the substantially lower spreads on foreign bonds. In the past several months,
the lower level of interest rates has not resulted in improved lending
terms for the corporate sector. However, we anticipate that the policy
CURRENT ACCOUNT BALANCE
of low interest rates will take effect in the second half of the year in
terms of the volume of lending, which has still been stagnating up
US$ mn
800
until now.
400
External sector: current account deficit widening
In the first quarter the current account was influenced by a sharp
increase in the trade surplus along with a slight increase in the
deficit in the services account. The higher trade surplus year-on-
0
-400
-800
year is based on a reduction of imports (-16% year-on-year), which
more than offset the decline in exports (-11% year-on-year). This
-1200
I/99
III/99
I/00
III/00
I/01
III/01
I/02
trend is a reflection of the poor level of domestic demand as well as
Dresdner Bank Lateinamerika, Spotlight 6/2002, Chile
21
lower prices, on the whole, of Chilean exports (export merchandise
REGIONAL EXPORT STRUCTURE
index: -16.4% year-on-year). The Argentinean crisis, which is im-
(% of total exports 2001)
pacting only to a limited degree on exports (fewer than 3% of exAsia
26.5%
Europe
28.2%
ports went to Argentina in 2001) is noticeably above all in the services account. For the year as a whole, we anticipate a marked
reduction of revenues from tourism and dividend and profit transfers from Argentina, where Chilean companies traditionally have
Argentina
3.1%
Others
2.6%
substantial interests. In total, the current account this year is likely to
register a slightly higher deficit of 2.5% of GDP compared with 2001
(1.9% of GDP).
Latin America
excl. Argentina
19.6%
North America
20.0%
External trade policy: trade agreement signed with the EU
The association agreement under discussion for some time now
between Chile and the EU was signed at the EU-Latin America
summit meeting in Madrid. Apart from introducing a free trade zone
for goods and services, this agreement comprises the foundations
COPPER PRICE
for political dialog along with institutional and economic cooperation. Moreover, arrangements are also being made on human rights
8e
c/lb
LME, forward 3 months
100
and foreign policy, including security issues. For the time being,
however, the agreement will need to be ratified by the national par-
90
liaments. The economic effects will therefore take several months
80
to materialize.
The EU is the principal trading partner for Chile (26% of exports,
70
25% of imports). What is noteworthy is that the agreement also com60
prehensively provides for free trade for products from the agricultural and fishing sector.
50
Nov-98 May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02
Page 1
For Chile, this agreement, which will effect a relatively far-reaching
liberalization of merchandise trade, will open up the opportunity to
reduce the weight of copper exports and enhance the balance of
the country’s range of exports as a whole. In addition, we anticipate
that Chile will become more attractive as an investment location for
EXCHANGE RATE
the EU countries and that the level of direct investment in Chile from
Europe will increase. Already today, with an investment portfolio of
Pesos/US$
750
US$ 10.4 billion the EU is the second only to the U.S. as a key
investor in Chile.
700
This agreement may also act as a catalyst for the free trade agree650
ment being negotiated at present with the U.S. In this regard, we
expect president Bush to receive the “fast track” mandate (which
600
will facilitate speedier negotiations) from Congress this year.
550
500
May-01
22
Sep-01
Jan-02
May-02
Cyrus de la Rubia +49 40 3595 3889
Thomas Pohl +49 40 3595 3481
Dresdner Bank Lateinamerika, Spotlight 6/2002, Chile
MONTHLY AND QUARTERLY FIGURES
CHILE: MONTHLY INDICATORS
Jan-02
Feb-02
Mar-02
Apr-02
next/latest
DOMESTIC ECONOMY
IMACEC
% yoy
3.0
1.3
0.
0.4
17-Jun
Industrial production (INE)
% yoy
4.5
0.9
6.6
6.
30-May
Mining production
% yoy
-1.7
-5.0
-0
-0.3
Retail sales
% yoy
1.6
2.1
1.2
%
8.0
8.3
8.
8.8
mn
5.5
5.4
5.
5.4
27-Jun
Labour cost index
% yoy
0.6
0.3
-0.1
-0
27-Jun
Consumer prices
% yoy
2.2
2.5
2.6
Consumer prices
% mom
-0.1
0.0
Wholesale prices
% yoy
3.9
4.6
Wholesale prices
% mom
0.4
0.5
Money supply M1
% yoy
20.0
Base rate, 90 days PDBC (month-avrg., latest: 05/28)
%
Loan rate (average)
%
Unemployment rate
Employment
30-May
0.8
0.
22-Jun
27-Jun
2.
2.5
4-Jun
0.5
0.4
0.
4-Jun
6.1
6.
6.5
4-Jun
1.3
2.3
2.
4-Jun
18.0
11.4
10.
10.0
7-Jun
6.0
5.6
4.7
4.
4.4
4.1
16.3
16.2
15.6
16.
16.2
7-Jun
%
6.2
5.8
5.0
4.7
4.
7-Jun
Lending to private sector
% mom
0.5
0.7
0.7
-3
-3.6
24-Jun
Total financial savings (M7)
% mom
-0.8
0.5
0.4
0.3
0.
7-Jun
Deposit rate (average)
EXTERNAL SECTOR
Merchandise exports
US$ mn
1547
1338
1403
1639
17-Jun
Merchandise exports
% yoy
-11.9
-5.6
-18.0
-2
-2.5
17-Jun
Merchandise imports
US$ mn
1433
965
1199
1241
17-Jun
Merchandise imports
% yoy
-5.5
-24.0
-19.8
-3.0
-3
17-Jun
398
17-Jun
Trade balance
US$ mn
115
373
204
Net foreign direct investment
US$ mn
91.0
106.9
49.5
49.
24-Jun
Portfolio investment (net)
US$ c/lb
-147.7
97.5
- 730.
730.4
24-Jun
Mrd. US$
68.2
70.8
72.8
72.1
72.
73.5
73.
US$ bn
14.2
14.1
14.1
15.4
15.
7-Jun
CLP
667
679
663
651
656
Q2 01
Q3 01
Q4 01
Q1 02
next/latest
Copper price (monthly average, latest: 05/27)
Foreign exchange reserves*
US$ exchange rate (latest: 05/28)
CHILE: QUARTERLY INDICATORS
DOMESTIC ECONOMY
GDP
% yoy
3.8
2.7
1.7
1.5
23-Aug
Total consumption + change in stocks
% yoy
-2.0
-1.3
-4.5
-2.6
23-Aug
Private and public investment
% yoy
3.4
3.7
-6.2
-2.0
23-Aug
Domestic demand
% yoy
-0.7
-0.2
-4.9
-2.5
23-Aug
Exports (goods and services)
% yoy
13.6
7.2
12.5
6.0
23-Aug
Imports (goods and services)
% yoy
-1.1
-2.0
-8.9
-5.5
23-Aug
Pesos bn
-4.0
-10.8
-274.5
-96.8
20-Aug
Current account balance
US$ bn
-0.20
-0.78
-0.25
0.25
23-Aug
Net foreign direct investment
US$ bn
0.65
0.75
-0.19
0.25
23-Aug
Portfolio investment
US$ bn
1.16
0.72
0.18
-0.78
23-Aug
Capital account**
US$ bn
-0.04
1.61
0.47
-0.47
23-Aug
Change in foreign exchange reserves
US$ bn
-0.15
-0.29
-0.06
-0.16
23-Aug
Gross foreign debt
US$ bn
37.0
37.1
37.80
37.40
7-Aug
Short-term foreign debt
US$ bn
1.99
1.85
2.06
2.02
7-Aug
Budget balance, public sector
EXTERNAL SECTOR
* month-end
** incl. residual items
Dresdner Bank Lateinamerika, Spotlight 6/2002, Chile
23
COLOMBIA: NEW PRESIDENT FACING HERCULEAN CHALLENGE
Area
Population
1 141 748 sq. km
43.1 million (+1.9% p.a.)
State president
Finance minister
Central bank president
Andrés Pastrana Arango
Juan Manuel Santos Calderón
Miguel Urrutia Montoya
Next elections
State president: May 26, 2002
Parliament: March 10, 2002
GDP per capita
US$ 1 900 (2001)
Investment
Savings
10% of GDP (2000)
12% of GDP (2000)
Exchange rate system
Monetary policy
Flexible exchange rate (floating)
Inflation targeting
Exports (2001)
Purchasing countries
Products
15% of GDP
USA 43%, EU 14%, Venezuela 14%
Manufactured goods 45%,
Crude oil and derivatives 26%, Coffee 6%
Imports (2001)
Supplier countries
Products
16% of GDP
USA 34%, EU 17%, Venezuela 6%
Primary and intermediate products 45%,
capital goods 35%, consumer goods 20%
Rating:
Moody’s: Ba2
S&P:BB
SUMMARY AND OUTLOOK
On May 26, Alvaro Uribe Velez was elected the new president in the first round of voting, winning 53% of all votes cast. The
challenges for the new government are immense. The conflicts with the guerrilla movement are escalating sharply, the
economy is extremely sluggish and public debt is burgeoning, giving rise for concern. We expect that once the new
president takes office at the beginning of August, he will tackle essential reforms (among other things the pension reform)
without delay. In addition he will start implementing the plans with regard to the reinforcement of the military and the police
force in order to improve the country’s security position and to gain the confidence of the population and business
community. While such measures could rapidly brighten up the mood in the country at least for a short while, the effective
results of combating the guerrilla movement with added force will only become apparent in a couple of years’ time.
24
Dresdner Bank Lateinamerika, Spotlight 6/2002, Colombia
ANNUAL FIGURES AND FORECASTS
COLOMBIA
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
-4.2
2.7
1.6
1.6
2.5
GDP
US$ bn
86.3
83.2
83.4
90.8
87.8
Inflation (year-end)
%
9.2
8.8
7.7
6.2
5.9
Inflation (average)
%
10.9
9.2
8.0
6.1
6.0
PUBLIC SECTOR
Budget balance, central government
% GDP
-7.5
-5.9
-4.7
-4.6
-4.5
Budget balance, public sector
% GDP
-6.5
-3.6
-3.4
-3.1
-2.9
Public debt
% GDP
38
54
60
62
64
Amortization
US$ bn
6.1
5.7
6.5
n.a.
n.a.
Gross financing needs
US$ bn
11.0
8.2
9.3
n.a.
n.a.
EXTERNAL SECTOR
Merchandise exports
US$ bn
12.0
13.6
12.8
12.8
13.4
Merchandise imports
US$ bn
10.2
11.1
12.3
12.1
13.8
Trade balance
US$ bn
1.8
2.5
0.5
0.7
-0.4
Current account balance
US$ bn
0.3
0.4
-1.7
-2.6
-3.2
Current account balance
% GDP
0.3
0.5
-2.0
-2.9
-3.6
Net direct investment
US$ bn
1.4
2.1
2.1
1.7
2.3
Foreign exchange reserves, year-end
US$ bn
8.0
8.9
10.2
9.8
9.4
Import cover ***
months
6.1
6.0
6.2
6.0
5.5
US$ exchange rate, year-end
Pesos
1874
2229
2291
2550
2775
US$ exchange rate, average
Pesos
1756
2088
2300
2400
2656
Gross foreign debt
US$ bn
36.0
35.9
38.5
40.8
42.3
Foreign debt
% exports***
245
218
244
263
263
Short-term foreign debt
US$ bn
5.5
4.2
4.3
4.7
5.0
FOREIGN DEBT
Foreign debt amortization
US$ bn
4.9
5.6
5.7
5.5
6.5
Foreign debt service
US$ bn
7.5
8.3
8.3
8.2
9.3
Foreign debt service
% exports***
51
50
53
53
58
15.8
13.4
11.4
11.2
12.5
998
713
1071*
1176
813
448
561
588
423
755
516
574
FINANCIAL MARKETS (year-end)
Deposit rate (DTF, 90 days)
%
IBB stock index (peso based, 2002: 05/27)*
IFCG stock index (US$ based, 2002: 05/27)
Bond market yield spread (2002: 05/27)**
* as of July 2001: IGBC
** EMBI+
bp
***goods and services
Dresdner Bank Lateinamerika, Spotlight 6/2002, Colombia
f=forecast
25
PRESIDENTIAL ELECTION
Domestic policy: Uribe becomes new president
On May 26, Alvaro Uribe Velez was elected the new president of
% of votes
60
Colombia for the 2002-2006 term of office, securing 53% of all votes
50
cast. He is scheduled to take office on August 7, 2002. His main
40
rival, Horacio Serpa (from the Liberal Party) won 32% of the vote.
The election itself proceeded relatively smoothly. Only 6 out of 1098
30
municipalities were unable to cast their votes. We – along with the
20
financial markets – consider the election of Uribe, former governor
10
of Antioquia (1995-1997) and senator from 1986 to 1994 as positive. The fact that he won an outright victory in the first round of
0
Uribe
Serpa
Garzon
Sanin
Betancourt
Others
voting gives him a high degree of legitimacy. This gives him a good
basis in order to implement the planned reforms.
What can be expected from the new government and from Uribe?
His election campaign (“firm hand, big heart”) can be characterized e.g. by such points of emphasis as national security, political
reforms, fighting corruption, and judicial and pension reforms. Na-
PUBLIC DEBT
tional security and a harder stance against guerrilla organizations
% of GDP
are to be supported by boosting the number of professional soldiers
70
from 55,000 to 100,000 as well as by doubling the size of the police
60
force. In addition, Uribe is seeking to establish civil defense groups.
In our view there is a wide political consensus that only a sustained
50
military weakening of the rebel organizations (FARC, ELN as well as
40
the paramilitary) and the establishment of an increased military threat
30
potential will galvanize these groups into making genuine concessions toward peace. Should renegotiations take place at some point
20
1998
1999
2000
2001
2002f
2003f
in time, the UN could act as an intermediary with the aim of achieving a cease-fire. Uribe indicated as much shortly after his election.
All in all, bringing peace to the country should take several years,
accompanied by repeated setbacks.
GDP CHANGE (REAL)
Public finances: critical dynamics of debt
The Uribe government is likely to boost military spending signifi-
% yoy
4
cantly (year 2000: 1.89% of GDP), which is very low compared to
2
other countries. In our view, however, Uribe is taking the problem of
increasing public-sector debt very seriously and will make an at-
0
tempt to offset the increased level of spending. Accordingly, a project
-2
aimed at increasing the efficiency of the tax collection system as
-4
well as a pension reform (focusing on special pensions for civil
-6
servants) should be on the agenda very soon. However, these measures – provided they can be adopted – can only improve the bud-
-8
I/99 III/99 I/00 III/00 I/01 III/01 I/02f III/02f I/03f III/03f
get situation in the medium to long term. Consequently, the new
government will hardly be able to avoid spending cuts in other sec-
26
Dresdner Bank Lateinamerika, Spotlight 6/2002, Colombia
LABOR MARKET
tors. In this connection, Uribe aims at decreasing administration costs.
The combination of high financing costs (spread EMBI+ at around
mn
570 bp) and weak growth as well as a pension system which will
10.0
employed
unemployed
unemployment rate %
24
soon be sliding into deficit on a cash basis is leading to a very difficult situation that requires a pressing need for action. At the same
time it is uncertain whether the low level of interest rates on the local
22
7.5
20
5.0
18
capital market (with correspondingly low financing costs) will be
sustained. The debt swaps carried out by the government in the
16
2.5
14
preceding and current year can be seen as an indication of the
tense situation. In this context we expect swap transactions to con-
12
0.0
Mar-00
tinue with the objective of increasing the average term of indebted-
Sep-00
Mar-01
Sep-01
Mar-02
ness. However, the Argentinean crisis has shown that debt swaps
are not a sustainable solution without implementing drastic changes
in the structure of spending and revenues. An extension of the term
of the IMF agreement (scheduled to expire at the end of the year),
which Uribe is aiming at, should help to implement the reforms with
STOCK MARKET
increased impetus.
IBB/ IGBC (Peso)
IFCG
800
1200
Economy: no revitalization in sight
Last year’s weak economic growth (1.6%) continued in the first quar-
1100
ter of 2002 (1.5% year-on-year). This is attributable among other
things to the decrease in industrial production (-0.7% year-on-year,
800
GDP). In addition, the marked decline in imports (especially capital
700
goods and inputs) is an indicator of the weak level of domestic de-
600
mand. At the same time, however, the general sentiment in the coun-
IBB
900
15% of GDP) and in the oil/coal sector (-2% year-on-year, 5% of
700
IGBC
1000
600
500
May-00
400
Nov-00
May-01
Nov-01
May-02
try seems to be cautiously optimistic (stable deposits, rising stock
market index). Nevertheless, for the year as a whole we expect the
low level of economic growth to persist: the low level of interest rates
– the central bank has cut interest rates again – has hardly provided
any significant impetus for domestic demand; in spite of the recent
EXTERNAL SECTOR
depreciation the peso remains relatively strong and impedes the
competitiveness of non-traditional exports, with the depreciation and
US$ mn
1400
simultaneous recession in Venezuela resulting in lower demand for
1200
industrial goods. After all, the future government has hardly any bud-
1000
getary leeway to present a package of economic measures. All in
800
all, therefore, we expect a growth rate of as little as 1.6% in the
600
current year, which will mean a decline in per-capita income.
400
exports
imports
balance
200
Exchange rate: upside tendency comes to an end
Following a long phase of stability, the peso has depreciated to a
0
-200
Feb-99
Aug-99
Feb-00
Aug-00
Feb-01
Aug-01
Feb-02
marked degree over the last few weeks. We anticipate that the de-
Dresdner Bank Lateinamerika, Spotlight 6/2002, Colombia
27
preciation will continue – if more gradually – over the next several
EXPORTS BY REGION
months. The inflows of U.S. dollars derived from public-sector bond
issues, which had contributed to a nominal appreciation in the preceding months, are most likely to decrease in the second half of this
EU
year. In addition, the policy of low interest rates will support the ten-
USA
Mercosur
dency toward depreciation. It remains unclear whether further currency inflows can be anticipated in the forthcoming months from
accounts containing illegal funds, which presumably have increas-
Venezuela
ingly been closed due to tightened control mechanisms after the
others
Japan
events of September 11, 2001. In any event, we expect calm to return
to the forex market once the government is inaugurated on August 7.
Ecuador
We assume that the exchange rate at the end of the year will be 2550
pesos/US$.
External sector: Extension of Preference Agreement delayed
The preference agreement between Colombia and the U.S. expired
OIL PRICE
on May 16 following a provisional extension. This means a setback
US$/barrel
40
for the export industry since customs duties now ranging from 7% to
Cusiana
30% are proving to be a burden on the export sector. The govern-
35
ment estimates that thanks to the ATPA agreement (in force since
30
1990) around 140,000 new jobs have been created. Negotiations in
25
the U.S. Congress regarding a further extension are relatively diffi-
20
cult on account of as yet unresolved legal disputes relating to com-
15
pliance with contracts between Colombia and U.S. enterprises. A
10
further problem is that the legislative package provides for a “fast-
5
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
track” mandate for free-trade negotiations with Latin American countries, which is a particularly controversial issue. Nevertheless, one
hurdle (the vote in the U.S. Congress) has been overcome. All that is
still needed now is a vote in the U.S. Senate; however, this will most
probably not take place before the summer recess. We expect the
ATPA to be extended by the end of this year because U.S. interna-
EXCHANGE RATE
tional trade policy is closely linked to combating drug cultivation.
At the same time, the U.S. Congress is considering granting US$ 98
Pesos/US$
2400
million in military aid specifically to protect the Caño Limon pipeline.
This would mean a positive signal for Colombia’s war against the
2300
guerrillas: Until now U.S. military aid has always focused on combating the cultivation of drugs. The U.S. Congress has always taken a
2200
negative stance toward extending aid to include combating the guer2100
rilla organizations. One of the reasons cited is the violation of human
rights, which the Colombian military has been accused of.
2000
May-00
28
Nov-00
May-01
Nov-01
May-02
Cyrus de la Rubia +49 40 3593 3889
Dresdner Bank Lateinamerika, Spotlight 6/2002, Colombia
MONTHLY AND QUARTERLY FIGURES
COLOMBIA: MONTHLY INDICATORS
Jan-02
Feb-02
Mar 02
Apr-02
next/latest
DOMESTIC ECONOMY
Industrial production
% yoy
0.1
-0.5
-0
30-May
Retail sales
% yoy
1.9
1.
2.6
30-May
%
20.4
18.8
17.7
17.
Unemployment rate (urban)
31-May
Active labour force (urban)
% yoy
1.7
1.3
3.
3.6
Consumer prices
% yoy
7.4
6.7
5.9
5.
5.6
5-Jun
Consumer prices
% mom
0.8
1.3
0.7
0.
0.9
5-Jun
Producer prices
% yoy
5.5
4.0
3.6
3.
Producer prices
31-May
5-Jun
% mom
0.4
0.3
0.
0.5
Money supply M1 (latest: 05/22)*
% yoy
7.8
13.0
13.1
16.1
16.
Money supply M3 (latest: 05/10)*
% yoy
8.1
8.0
8.1
8.6
8.
8.9
%
18.5
18.0
18.6
16.7
16.
15.
15.4
9.
9.8
9.0
Lending rate (latest: 05/10)
5-Jun
20.
20.6
Deposit rate (DTF, 90 days, latest: 05/25)*
%
11.2
10.7
10.6
Treasury bills (TES, 1 year, latest: 05/24)*
%
11.8
11.8
11.5
Interbank interest rate (latest: 05/24)
%
7.9
7.8
7.3
6.1
6.
5.5
% yoy
-1.7
-1.6
-1.9
-3.0
-3
-3.3
Credit volume (latest: 05/10)*
9.5
9.
EXTERNAL SECTOR
Merchandise exports
US$ mn
941
945
5-Jun
Merchandise exports
% yoy
-7.5
-1.7
-1
5-Jun
Merchandise imports
US$ mn
902
830
846
25-Jun
Merchandise imports
% yoy
0.6
-19.3
-19.5
25-Jun
Trade balance
US$ mn
39
115
Foreign exchange reserves (latest: 05/22)*
US$ mn
10069
10438
10135
pesos
2265
2310
2261
Q1 01
Q2 01
Q3 01
Q4 01
1.8
1.0
1.7
US$ exchange rate (latest: 05/27)*
COLOMBIA: QUARTERLY INDICATORS
5-Jun
10499
10566
2267
next/latest
DOMESTIC ECONOMY
GDP
% yoy
1.8
GDP
% qoq
-0.1
0.5
0.6
0.7
28-Jun
Domestic consumption
% yoy
1.2
1.0
1.0
2.2
28-Jun
Domestic investment
% yoy
12.3
20.4
4.4
2.7
28-Jun
Domestic demand
% yoy
2.7
3.6
1.5
2.3
28-Jun
Exports (goods and services)
% yoy
6.0
8.9
5.1
1.5
28-Jun
Imports (goods and services)
% yoy
11.4
20.4
8.2
4.7
28-Jun
Manufacturing industry
% yoy
2.8
1.3
-3.3
-3.0
28-Jun
28-Jun
Financial sector and real estate
28-Jun
% yoy
1.2
0.1
1.2
-6.3
Pesos bn
-1351
-2384
-1114
-4204
Merchandise exports
US$ bn
3.09
3.25
3.36
3.06
28-Jun
Merchandise imports
US$ bn
3.05
3.22
3.04
2.96
28-Jun
Trade balance
US$ bn
0.04
0.03
0.32
0.10
28-Jun
Current account balance
US$ bn
-0.66
-0.44
-0.21
-0.38
28-Jun
Net foreign direct investment
US$ bn
0.48
0.78
0.40
0.42
28-Jun
Portfolio investment
US$ bn
0.71
1.81
0.11
0.76
28-Jun
Capital account**
US$ bn
0.98
0.52
0.40
1.00
28-Jun
US$ bn
0.28
-0.01
0.49
0.48
Budget balance, central government
EXTERNAL SECTOR
Change in foreign exchange reserves
* month-end
** incl. residual items
Dresdner Bank Lateinamerika, Spotlight 6/2002, Colombia
29
COSTA RICA: ADVENT OF STRUCTURAL REFORMS?
Area
Population
51 100 sq. km
3.7 million (+1.7% p.a.)
State president
Finance minister
Central bank president
Abel Pacheco de la Espriella
Jorge Walter Bolaños
Eduardo Lizano Fait
Next elections
State president: February 2006
Parliament: February 2006
GDP per capita
US$ 4 520 (2001)
Rating
Moody’s: Ba1
S&P: BB
ANNUAL FIGURES AND FORECASTS
COSTA RICA
1999
2000
2001
2002f
2003f
8.2
2.2
0.9
2.0
3.5
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
15.2
16.0
16.8
17.4
18.0
Inflation (year-end)
%
10.1
10.2
11.0
9.0
10.0
Inflation (year-average)
%
10.0
11.0
11.3
10.0
9.5
Budget balance, public sector
% GDP
-3.2
-3.7
-2.9
-3.2
-3.0
Merchandise exports
US$ mn
6611
5861
5030
5130
5550
Merchandise imports
US$ mn
5996
6072
6254
6350
6600
Trade balance
US$ mn
615
-211
-1224
-1220
-1050
Current account balance
US$ mn
-697
-757
-750
-923
-998
Current account balance
% GDP
-4.6
-4.7
-4.5
-5.3
-5.5
Net foreign direct investment
US$ mn
615
404
447
450
470
Foreign exchange reserves, year-end
US$ mn
1460
1291
1330
1250
1050
Import cover *
months
1.9
1.8
2.0
1.8
1.4
US$ exchange rate, year-end
Colones
298
318
342
373
408
US$ exchange rate, average
Colones
286
308
329
357
391
Gross foreign debt
US$ bn
4.2
4.5
4.9
5.2
5.6
Foreign debt
% exports*
50
58
69
72
71
Short-term foreign debt
US$ bn
0.8
0.9
1.0
1.1
1.3
8167
10891
12028
11851
EXTERNAL SECTOR
FOREIGN DEBT
FINANCIAL MARKETS (year-end)
BCT stock index (colon based, 2002:05/27)
*goods and services
30
f=forecast
Dresdner Bank Lateinamerika, Spotlight 6/2002, Costa Rica
SUMMARY AND OUTLOOK
Domestic policy: Christian democrat minority government?
The country’s state president, Abel Pacheco of the Christian democrats, in office since early May this year, wants to introduce key structural reforms such as the modernization of the country’s infrastructure
and the consolidation of public finances. In a run-off ballot held in April,
Pacheco had gained 58% of all votes. It is questionable, however,
whether he can push through his concept in parliament. At the parliamentary elections of February, his party only managed to secure a third
of all seats. Far-reaching reforms are likely to meet with resistance
among the social democrats (30%) and the deputies of the strengthened Partido Acción Ciudadana, which won 25% of the seats under
Ottón Solís, who opposes the traditional two-party system. However, we
expect the government to be able to continue its liberal course in exter-
Following the presidential election, the Christian
democrats continue to rule; however, parliament
is dominated by other parties. It is questionable,
therefore, whether progress is being made with
the necessary structural reforms. The objectives
of reducing the budget deficit (forecast for 2002:
3%) and domestic debt (40% of GDP) remain a
challenge. Since the economic recovery is only
taking shape very gradually, the current account
deficit is likely to widen only slightly, to 5% of GDP,
and should largely be offset by private capital
inflows.
nal economic policy.
Domestic economy: interest payments constituting a burden on the
treasury
Due to a further increase in interest payments on the state’s high
INDICES OF ECONOMIC ACTIVITY
domestic debt (40% of GDP) the Costa Rican budget deficit will probably
1e
swell to just over 3% of GDP, even if the government has planned to
%, y-o-y
9
total
excl. electronic industry
implement taxation reforms and spending cuts. In 2003 Costa Rica will
probably issue a higher volume of eurobonds than usual in the past (in
7
2002 the figure stood at US$ 250 million) in order to finance the temporarily
5
growing amortization payments. In the medium term, the government
3
will need to be stricter in pushing through the fiscal policy adjustment to
limit the debt burden on the public sector. This year the economy should
1
reach a growth rate of 2% (2001: +0.9%) since production levels of the
-1
microchip industry will rise slightly following sharp production shortfalls,
Mar-00
and other industries as well as the tourism sector should recover in the
Sep-00
Mar-01
Sep-01
Mar-02
Page 1
wake of the anticipated upturn in the U.S. The upward tendency should
continue in all sectors in 2003.
External sector: exports lackluster, scarce reserves
This year the country’s exports will hardly grow since the sales price
FISCAL DEFICIT AND INFLATION
trends for microchips remain weak. The current account deficit should
widen only slightly – from 4.5% to just over 5% of GDP: the demand for
% of GDP
4
Budget Deficit
Inflation, % y-o-y
14
imports will increase, but profit remittances to foreign countries, which
last year saw a dramatic drop due to shortfalls in sales in the electronics
12
3
10
industry, are likely to remain relatively low for the time being. In the year
2002, Costa Rica can count on sufficient capital inflows in the form of
8
2
6
investments and credits, which means that the country will only have to
resort to its scare foreign currency reserves (import cover: 1.8 months)
to a limited degree.
4
1
2
0
Ingrid Grünewald +49 40 3595 3487
Dresdner Bank Lateinamerika, Spotlight 6/2002, Costa Rica
0
1997
1999
2001
2003f
31
ECUADOR: IMF TAKES A HARD STANCE
Area
Population
270 190 sq. km
12.7 million (+ 2.1% p.a.)
State president
Economic and
Finance minister
Central bank president
Gustavo Noboa Bejarano
Carlos Julio Emanuel
Mauricio Yépez
Next elections
State president: October 2002
Parliament: October 2002
GDP per capita
US$ 1 350 (2001)
Rating
Moody’s: Caa 2
S&P: CCC+
ANNUAL FIGURES AND FORECASTS
ECUADOR
1999
2000
2001e
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
-7.3
2.3
5.6
3.5
3.2
GDP
US$ bn
13.7
13.6
18.0
20.5
22.8
Inflation (year-end)
%
60.7
91.0
22.4
10.0
8.0
Budget balance, public sector
% GDP
-5.9
1.7
1.3
1.2
0.5
Merchandise exports
US$ bn
4.5
5.0
4.7
4.7
5.0
Merchandise imports
US$ bn
2.9
3.6
5.2
6.1
6.3
Trade balance
US$ bn
1.6
1.4
-0.5
-1.4
-1.3
Current account balance
US$ bn
0.9
0.9
-0.8
-1.6
-1.3
Current account balance
% GDP
6.6
6.6
-4.4
-7.8
-5.7
Net direct investment
US$ bn
0.6
0.7
1.3
1.4
1.3
Foreign exchange reserves, year-end
US$ bn
0.6
0.9
0.8
0.8
0.9
Import cover *
months
1.3
1.7
1.2
1.1
1.2
Gross foreign debt
US$ bn
17.0
13.9
14.7
15.4
16.0
Foreign debt
% exports**
321
232
263
270
262
Short-term foreign debt
US$ bn
1.2
1.2
1.3
1.4
1.5
Foreign debt amortization
US$ bn
0.8
1.0
0.9
1.0
1.0
Foreign debt service
US$ bn
1.9
2.0
1.9
2.0
2.1
Foreign debt service
% exports**
36
33
34
35
34
4.8
EXTERNAL SECTOR
FOREIGN DEBT
FINANCIAL MARKETS (year-end)
Interbanking rate (average rate)
%
IFCF stock index (US$ based, 2001: 05/27)
Bond market yield (2001: 05/27)**
*goods and services **EMBI+
32
%
152.4
4.5
2.5
3.5
11.2
28.9
27.5
39.9
6277
1414
1254
1216
e=estimate f=forecast
Dresdner Bank Lateinamerika, Spotlight 6/2002, Ecuador
SUMMARY AND OUTLOOK
Domestic economy: public finances hanging by a single thread
Since Ecuador pulled the emergency break in abolishing its own currency and opting for the US dollar in the year 2000, the advances
made in terms of the macro-economic stabilization of the country have
been notable. Whereas public debt still amounted to 120% of GDP in
the year 1999, this year it will probably drop to about 70% of GDP.
However, since the public sector remains cut off both from the international capital market and from national sources of finance, the government must not only generate budget surpluses – which it should manage to accomplish once again this year thanks to the above-average
oil prices; it will also be dependent on multilateral capital inflows in the
Surprising change of direction by the IMF: this
time the Fund was uncompromisingly strict in light
of high discretionary spending rules concerning
the use of OCP revenues, refusing to agree to a
new standby agreement. Whether it will be
possible to reach an agreement with the IMF
before the presidential elections in October is
questionable. Without multilateral financial
assistance, the public sector will inevitably slide
toward a renewed default in the year 2003.
foreseeable future in order to meet its amortization payments. In the
past, the IMF had been accommodating to this small country and confined itself to compliance with quantitative parameters, whereas the
qualitative targets (e.g. privatizations) were largely neglected. Now the
IMF has changed its course, refusing to sign a fresh standby agreement with the country after the rules concerning the use of publicsector revenues generated by the new oil pipeline (OCP) as of end-
GDP CHANGE (REAL) & INFLATION
2003 leave the government with too much discretionary spending power.
While this can still be remedied, the forthcoming presidential elections
scheduled for October 20 will not make matters any easier. If no agree-
GDP, %
inflation,
100
10
ment is reached, this will mean that the budget will lack about US$ 370
80
5
million in multilateral funding. In the short term, liquidity bottlenecks
60
could be bridged e.g. by delaying payments to suppliers or to the Paris
0
Club, for instance – which already is common practice. In view of the
40
negative dynamics an ensuing loss of confidence would trigger, the
-5
20
question as to whether the country will have to default on its debt yet
again may recur in the second half of 2003.
0
-10
1999
2000
2001
2002f
2003f
External sector: sustainability of dollarization
There are good reasons why the IMF is pushing for a sustained
consolidation of public finances. The more austere the country’s fiscal
policy, the lower the upward pressure on the inflation and exchange
rates in real terms. Today the real exchange rate already is higher than
CURRENT ACCOUNT & EXCHANGE RATE
it was throughout the 1990s. And the inflation rate remains above international levels. While the current account deficit of about 8% of GDP
US$ bn
3
current account balance
real FX rate
160
anticipated for 2002 should not be overrated in light of the special
effects of the pipeline construction, the structural deficit is likely to
April
have already reached an alarming height. This applies in particular
1
against the backdrop of the already high level of Ecuador’s foreign
0
debt. In view of the lack of dynamics of structural reforms, in the medium
-1
term we consider the feasibility of the dollarization to be in severe
140
2
100
80
60
40
-2
20
danger.
0
-3
Thorsten Rülle, Miami + 1 305 810 3855
Dresdner Bank Lateinamerika, Spotlight 6/2002, Ecuador
120
1997
1998
1999
2000
2001
2002f
33
GUATEMALA: STAND-BY FACILITY OF IMF
Area
Population
109 000 sq. km
11.7 million (+ 2.7% p.a.)
State president
Finance minister
Central bank president
Alfonso Portillo Cabrera
Eduardo Weymann Fuentes
Lizardo Sosa López
Next elections
State president: November 2003
Parliament: November 2003
GDP per capita
US$ 1 780 (2001)
Rating
Moody’s: Ba2
S&P: BB
ANNUAL FIGURES AND FORECASTS
GUATEMALA
1999
2000
2001e
2002f
2003f
3.5
3.3
2.1
2.3
2.8
24.2
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
18.3
19.1
20.7
22.4
Inflation (year-end)
%
4.9
5.1
8.9
9.0
9.0
Inflation (year-average)
%
4.9
6.0
7.6
9.0
9.0
Budget balance, public sector
% GDP
-2.9
-2.0
-3.0
-2.2
-2.0
Merchandise exports*
US$ mn
2488
2708
2412
2484
2695
Merchandise imports*
US$ mn
4176
4750
5000
5200
5400
EXTERNAL SECTOR
Trade balance*
US$ mn
-1688
-2042
-2588
-2716
-2705
Current account balance
US$ mn
-1026
-1050
-1260
-1270
-1150
Current account balance
% GDP
-5.6
-5.5
-6.1
-5.7
-4.8
Net foreign direct investment
US$ mn
155
227
500
150
200
Foreign exchange reserves, year-end
US$ mn
1189
1746
2292
2100
1900
Import cover **
months
2.7
3.5
4.4
3.9
3.4
US$ exchange rate, year-end
Quetzales
7.73
7.70
7.95
8.20
8.60
us$ exchange rate, average
Quetzales
7.39
7.76
7.86
8.08
8.40
US$ bn
4.7
5.2
5.5
5.7
6.0
Foreign debt
% exports**
131
128
144
141
134
Short-term foreign debt
US$ bn
1.3
1.3
1.4
1.4
1.6
FOREIGN DEBT
Gross foreign debt
*excl.products of the in-bond processing industry
34
**goods and services
e=estimate f=forecast
Dresdner Bank Lateinamerika, Spotlight 6/2002 Guatemala
Economic policy: return to macro-economic stability
Foreign governments and multilateral financial institutions will continue to support the development of the Guatemalan economy: in
February this year they agreed to provide US$ 1.3 billion in financial
aid to enable the government to come closer to achieving the many
and various economic targets agreed with the guerrillas within the
scope of the peace treaty of 1996 (including high growth and the
alleviation of poverty). This also includes loans for the starting modernization and reinforcement of the fragile financial sector (US$ 0.4
billion) expected to be cleared by the World Bank and the Inter-American Development Bank soon, now that the IMF has already granted a
one-year standby facility to Guatemala (US$ 105 million) for fiscal
adjustment and to reform the financial market. Only in the medium
term will Guatemala probably be able to comply with the official lenders’ demand to increase the tax rate to 12% of GDP. However, tax
revenue should already rise this year thanks to a value added tax
hike. Since the interest expenses incurred by the central bank’s open
market operations to neutralize liquidity continue to cause a deficit
amounting to almost 1% of GDP, but it remains questionable whether
the public sector will already be able to reduce the overall budget
deficit from 3% to 1.5% of GDP – as agreed with the IMF. We anticipate
a 2% deficit of GDP, which will be financed with the proceeds of
earlier privatizations as well as internal and external loans, with access to the bond market remaining unproblematic. In the year 2002,
economic growth should only accelerate slightly: while the in-bond
industry and the tourism sector should gradually recover as the upturn in the U.S. starts to gain momentum, in the coffee sector the price
slump will continue. For the year 2003 we anticipate a GDP growth
rate of almost 3% as the upward trend in the case of non-traditional
exports is likely to strengthen and the state should launch infrastructure-related projects.
External sector: reserves remaining at a high level
We estimate that the country’s current account deficit will remain at
almost 6% of GDP due to the only slight improvement in export prospects and as import demand continues to rise. Guatemala will hardly
need to touch its cushion of reserves amounting to approx. US$ 2
billion (which the country managed to accumulate in the previous
year through capital inflows derived from a final installment for
privatizations and a eurobond issue) until the end of the year. Whereas
investments from abroad should cover only a tenth of the deficit, the
close cooperation with multilateral financial institutions is reinforcing
the country’s credibility, which means we can assume that the foreign
private sector will provide sufficient credit commitments.
Ingrid Grünewald +49 40 3595 3487
Dresdner Bank Lateinamerika, Spotlight 6/2002, Guatemala
SUMMARY AND OUTLOOK
Guatemala recently received commitments of
further international financial aid in order to return
to macro-economic stability. Under the current
monitoring program of the IMF, the state should
be able to reduce the budget deficit to 2% of
GDP. As multilateral credit funding is now being
freed, Guatemala also retains access to the
bond market, which means that no difficulties
should be encountered in financing the publicsector shortfall and the high current account
deficit.
FISCAL DEFICIT
% of GDP
4
government
consolidated public sector
forecast
3
2
1
0
1997
1999
2001
2003f
EXTERNAL SECTOR
US$ mn
6000
exports
imports
balance
4000
2000
0
-2000
-4000
1997
1998
1999
2000
2001
2002f
2003f
35
HONDURAS: PRIORITY ASSIGNED TO ALLEVIATING POVERTY
Aera
Population
112 000 sq. km
6.8 million (+ 3.4% p.a.)
State president
Finance minister
Central bank president
Ricardo Maduro Joest
Arturo Alvarado
Maria Elena Mondragón
Next elections
State president: November, 2005
Parliament: November 25, 2005
GDP per capita
US$ 920 (2001)
Rating
Moody’s: B2
ANNUAL FIGURES AND FORECASTS
HONDURAS
1999
2000
2001
2002f
2003f
-1.9
4.8
2.6
3.0
3.4
5.4
5.9
6.3
6.7
7.1
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
Inflation (year-end)
%
10.9
10.1
8.8
9.0
9.0
Inflation (year-average)
%
11.7
11.1
9.7
8.9
9.0
Budget balance, public sector*
% GDP
1.4
1.0
-2.5
-2.0
-1.0
Merchandise exports
US$ mn
1164
1370
1311
1330
1380
Merchandise imports
US$ mn
2510
2670
2814
2840
2900
Trade balance
US$ mn
-1346
-1300
-1503
-1510
-1520
Current account balance
US$ mn
-241
-257
-326
-381
-328
Current account balance
% GDP
-4.4
-4.4
-5.2
-5.7
-4.6
EXTERNAL SECTOR
Net foreign direct investment
US$ mn
237
262
195
240
280
Foreign exchange reserves, year-end
US$ mn
1258
1313
1416
1450
1570
Import cover **
months
4.6
4.4
4.5
4.7
4.9
US$ exchange rate, year-end
Lempiras
14.6
15.2
16.0
16.9
17.8
US$ exchange rate, average
Lempiras
14.2
14.8
15.7
16.5
17.4
US$ bn
5.33
5.33
5.48
5.61
5.23
Foreign debt
% exports**
227
208
215
210
184
Short-term foreign debt
US$ bn
0.4
0.4
0.4
0.4
0.4
*after grants
**goods and services
FOREIGN DEBT
Gross foreign debt
36
f=forecast
Dresdner Bank Lateinamerika, Spotlight 6/2002, Honduras
SUMMARY AND OUTLOOK
Domestic policy: new government likewise eligible for debt relief
Under the conservative state president in office since January this
year, Ricardo Maduro of the Partido Nacional (PN), the country’s
economic opening should continue. Not only the smaller parties
but also liberal politicians will support key structural reforms in
parliament (in which the PN has a simple majority of 48% of all
seats) as part of the long-term program to alleviate poverty currently
being coordinated by the government with the IMF. In essential
points – such as privatizations in infrastructure – the government’s
policies are meeting with a broad political consensus.
The IMF is likely to take into account in this year’s adjustment of the
Honduran development planning that the state will only manage to
In our assessment, the new conservative Maduro
government will be able to push through key
reforms within the scope of its program for poverty
reduction and high economic growth with the
support of other parties in parliament. The HIPC
debt relief for Honduras is moving within reach
thanks to „soft“ objectives laid down by the IMF,
which this highly indebted country will probably
be able to meet even if the government’s budget
deficit remains high and the current account deficit
is likely to rise to 6% of GDP.
reduce the government’s budget deficit very gradually, by means
of taxation reforms and spending cuts. Due to the faltering economy
last year and the decline in assistance from abroad, this deficit
widened to roughly 7% of GDP in 2001 (public-sector companies
continue to register surpluses). Ultimately, GDP should grow by
only 3% (2001: 2.6%) despite the recovery starting to take shape in
FOREIGN DEBT
the U.S. Without the price slump on the coffee market, a significantly
higher growth rate would have been manageable.
By continuing to endorse the program to reduce poverty, the IMF
1e
US$ bn
% of exports
6
350
5
300
will create a favorable framework to enable Honduras to meet the
economic policy parameters to qualify for approx. US$ 0.9 billion
250
4
200
in HIPC debt relief; this could enter into force starting in the year
3
2003.
2
150
100
1
Current account: gap continues to widen
The declining trend in visible and invisible exports is likely to be
50
0
0
1993
1995
1997
1999
2001
2003f
Page 1
reversed in the course of this year. In particular, we anticipate
double-digit growth rates in the in-bond industry and the return to
higher revenues from tourism. In addition, as in the previous year
Honduras can expect foreign currency receipts from private transfer
payments amounting to well over US$ 0.5 billion. Nevertheless, the
CURRENT ACCOUNT
current account deficit should widen from 5% to about 6% of GDP
as merchandise imports will increase in light of higher oil prices
and rising demand in the course of the economic upturn, and transfer
payments of foreign governments should decline. We expect that
Honduras will be able to absorb the deficit thanks to a rising inflow
of foreign investment and loans from multilateral financial
institutions. Indications are that the country’s foreign currency
reserves will likewise see a further slight increase to US$ 1.5 billion.
US$ mn
1000
Transfers
Current account balance
forecast
800
600
400
200
0
-200
-400
Ingrid Grünewald +49 40 3595 3487
Dresdner Bank Lateinamerika, Spotlight 6/2002, Honduras
1994
1996
1998
2000
2002f
37
JAMAICA: DEAD-END SITUATION
Aera
Population
11 425 sq.km
2.7 million (+ 0.9% p.a.)
State president
Finance minister
Central bank president
P.J. Patterson
Omar Davies
Derick Latibeadiere
Next elections
early in 2003
GDP per capita
US$ 2 840 (2001)
Rating
Moody’s: Ba3
S&P:B+
ANNUAL FIGURES AND FORECASTS
JAMAICA
1999
2000
2001e
2002f
2003f
-0.4
0.8
1.7
2.2
2.6
7.4
7.5
7.6
7.8
7.9
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
Inflation (year-end)
%
6.9
6.0
8.8
7.5
6.0
Inflation (year-average)
%
6.0
8.2
6.9
8.0
6.8
Budget balance, public sector*
% GDP
-4.3
-1.0
-5.7
-5.5
-4.0
Merchandise exports*
US$ mn
1499
1555
1452
1600
1700
Merchandise imports*
US$ mn
2686
2908
3032
3100
3250
Trade balance*
US$ mn
-1187
-1353
-1580
-1500
-1550
Current account balance
US$ mn
-211
-275
-650
-550
-450
Current account balance
% GDP
-2.9
-3.7
-8.6
-7.1
-5.8
EXTERNAL SECTOR
Net foreign direct investment
US$ mn
429
382
380
250
350
Foreign exchange reserves, year-end
US$ mn
555
1054
1901
1750
1650
Import cover **
months
1.5
2.6
4.4
4.1
3.7
US$ exchange rate, year-end
J$
41.30
45.40
47.40
52.50
56.00
US$ exchange rate, average
J$
39.04
42.70
46.00
50.00
54.00
US$ mn
3921
4287
5180
5400
5500
FOREIGN DEBT
Gross foreign debt
Foreign debt
% exports**
108
114
142
147
138
Short-term foreign debt
US$ mn
760
750
750
650
650
*incl. foreign assistance
38
** goods and services
e=estimate f=forecast
Dresdner Bank Lateinamerika, Spotlight 6/2002, Jamaica
Domestic sector: heavy public-sector debt burden
A fundamental improvement in the economic situation is not in sight,
even though GDP is likely to grow by slightly more than 2.4% this year
thanks to more favorable trends in bauxite production and tourism
(2001: + 1.7%). The high level of public-sector debt (end-2001 roughly
140% of GDP) remains the country’s biggest problem – an opinion
shared by the IMF engaged by Jamaica for consultancy purposes; the
interest burden generated by this debt is responsible for the major
budget deficits, among other things. The fiscal year April 2001/March
2002 is expected to have closed with a deficit of almost 6% of GDP; for
the 2002/03 budget year we anticipate a similar negative balance
owing to additional spending occasioned by the elections. Action
also needs to be taken to combat inflation, which reached a new alltime high of 9.4% in January. As long as the dismal economic situation
continues, compounded by uncertainties due to the forthcoming elections, the Jamaican dollar will tend to remain under pressure. The
central bank, which perceives a devaluation of the national currency
as the biggest danger to price stability, will therefore hardly contribute
proactively toward a reduction of the persistent, high level of interest
rates in real terms, which is proving to be a burden on the budget
situation and economic growth. This year’s public financing requirements should not be easy to cover since more than US$ 0.5 billion in
amortization payments is to be made on public-sector foreign debt
(2001: US$ 350 million) and since borrowing on the international capital
market could be prohibitively expensive due to the forthcoming elections.
SUMMARY AND OUTLOOK
General elections are to be held by early 2003
at the latest. Since prime minister Patterson has
not managed to even begin to resolve the
country’s major social problems, the outcome
of the election is completely open. Accordingly,
the government will avoid unpopular measures
this year wherever possible. The high publicsector debt of approx. 140% of GDP thus
continues to exert a massive adverse impact on
the country’s economic development. The
external sector is still not helping to ease the
situation either.
INTEREST RATE & INFLATION
credit interest rates, %
inflation % yoy
40
35
30
25
20
15
External sector: high capital inflows
In the year 2001 the current account deficit more than doubled, to
reach US$ 650 million (8.6% of GDP). Contributory factors in this regard were the deterioration of the trade balance due to external shocks,
the overvalued Jamaican dollar and home-made problems in the export sector (strike in the bauxite industry). However, the shortfall in
tourism already mentioned as well as increased interest payments
abroad following massive foreign-currency denominated bond issues
(2001: US$ 441 million in total) have had a negative impact. These
issues, which were partly already effected to cover the amortization
requirements of the year 2002, caused the surplus on capital account
to grow so strongly that the country’s foreign-currency reserves rose
to US$ 1.9 billion (import cover: 4 months) by end-2001. However, we
assume that it will not be possible to defend this favorable foreign
currency position in spite of a slight reduction of the current account
deficit to a probable 7% of GDP this year due to the high amortization
commitments of the public sector and as foreign investors are expected to be sidelined in the run-up to the elections.
10
5
0
Mar-00
Jul-00
Nov-00
Mar-01
Jul-01
Nov-01
Mar-02
CURRENT ACCOUNT
US$ mn
0
current account balance
trade balance
-400
-800
-1200
-1600
-2000
Bolko Schwanecke + 49 40 3595 3605
Dresdner Bank Lateinamerika, Spotlight 6/2002, Jamaica
1999
2000
2001
2002f
2003f
39
MEXIKO: PESO ENDS ITS RALLY
Area
Population
1 967 183 sq. km
101 million (+1.6% p.a.)
State president
Finance minister
Central bank president
Vicente Fox Quesada
Francisco Gil Diaz
Guillermo Ortiz Martínez
Next elections
State president: July 2006
Parliament: July 2003
GDP per capita
US$ 6 100 (2001)
Investment
Savings
23% of GDP (2000)
21% of GDP (2000)
Exchange rate system
Monetary policy
Flexible exchange rate
Inflation targeting
Exports (2000)
Purchasing countries
Products
29% of GDP
USA 89%, EU 3%, Canada 2%
Maquiladora 45%, rest of industry 40%
crude oil and derivatives 10%
Imports (2000)
Supplier countries
Products
30% of GDP
USA 73%, EU 9%, Japan 3%, Canada 2%
Intermediate goods for the maquiladora 35 %,
intermediate goods for the rest of the economy 41%,
capital goods 14%, consumer goods 10%
Rating:
Moody’s: Baa2
S&P: BBB-
SUMMARY AND OUTLOOK
Economic activity in Mexico lags behind that of its NAFTA partner, the U.S., by about one quarter. Essentially, this is due
to the automatic time lags arising from the primary transmission channel, exports. In addition, the forthcoming economic
upturn will in its first stage proceed a great deal more moderately than that of the U.S. This is not surprising since
Mexico’s monetary and fiscal policies are quite the opposite. While the U.S. saw one of the most expansive phases of
their monetary policy history, which already started at end-2000, the Mexican central bank is in the difficult end phase
of a disinflation process and should be able to reach its inflation target of 4.5% for end-2002 thanks to its consistent,
restrictive monetary policy. Unlike the U.S., Mexico has to keep expenditure in check in its public-sector budget since
the country thus far has not managed to reduce the structural deficit of the public sector to an extent that would create
any leeway in fiscal policy terms. However, as the latest depreciation of the peso has shown, structural reforms will be
inevitable in the medium term if the country wants to maintain the macro-economic stability it has gained.
40
Dresdner Bank Lateinamerika, Spotlight 6/2002, Mexico
ANNUAL FIGURES AND FORECASTS
MEXICO
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
3.7
6.6
-0.3
1.7
4.5
481.4
580.7
618.2
674.0
706.1
Inflation (year-end)
Inflation (average)
%
12.3
9.0
4.4
4.0
3.2
%
16.6
9.5
6.4
4.7
3.3
% GDP
-1.7
-1.5
-1.0
-1.0
-0.8
Budget balance, public sector
% GDP
-1.1
-1.1
-0.7
-0.7
-0.5
Public debt
% GDP
43
39
40
42
43
PUBLIC SECTOR
Budget balance, central government
Amortization (not incl. Cetes)***
US$ bn
n.a.
44.3
23.7
20.1
n.v.
Gross financing needs***
US$ bn
n.a.
52.9
31.2
26.6
n.v.
US$ bn
136.4
166.5
158.5
159.7
176.0
Merchandise imports
US$ bn
142.0
174.5
168.3
170.8
188.1
Trade balance
US$ bn
-5.6
-8.0
-9.7
-11.1
-12.2
Current account balance
US$ bn
-14.4
-17.7
-17.5
-19.3
-20.4
Current account balance
% GDP
-3.0
-3.1
-2.8
-2.9
-2.9
Net foreign direct investment
US$ bn
12.5
14.2
24.7
13.0
14.0
Foreign exchange reserves, year-end
US$ bn
31.8
35.5
44.7
45.7
47.2
Import cover **
months
2.2
2.0
2.6
2.7
2.5
US$ exchange rate, year-end
Pesos
9.5
9.6
9.2
9.3
9.6
US$ exchange rate, average
Pesos
9.6
9.5
9.3
9.2
9.4
167.5
158.6
160.0
166.0
172.0
110
85
91
94
88
38
40
43
44
46
EXTERNAL SECTOR
Merchandise exports
FOREIGN DEBT
Gross foreign debt
US$ bn
Foreign debt
% exports**
Short-term foreign debt
US$ bn
Foreign debt amortization
US$ bn
23
25
18
14
13
Foreign debt service
US$ bn
36
39
29
25
24
Foreign debt service
% exports**
24
21
17
14
12
6.2
FINANCIAL MARKETS (year-end)
Interest rates (Cetes, 28 days)
16.3
17.6
7.4
7.0
IPC stock index (peso based, 2002: 05/27)
%
7130
5652
6372
7357
IFCI stock index (US$ based, 2002: 05/27)
859
675
761
837
363
392
308
258
Bond market yield spread (2002: 05/27)*
* EMBI+ ** goods and services
bp
*** central government
Dresdner Bank Lateinamerika, Spotlight 6/2002, Mexico
f=forecast
41
Economic policy: energy sector reforms not in sight
GDP CHANGE (REAL)
Outside the country, president Fox is spreading optimism in light of
% J/J
9
future investment opportunities for international corporations in the
Mexican energy sector. And the amount of investment required actually
7
is quite substantial: according to specialists in this sector, US$ 5 billion
5
p.a. in capital spending will be required for the next ten years to be
3
able to meet the increasing level of energy consumption. In other
1
words, if the amount of investment required had to be covered by
-1
domestic savings alone, the savings rate would have to increase by
almost a full percentage point. And in spite of these undeniable facts,
-3
I/99 III/99 I/00 III/00 I/01 III/01 I/02 III/02p I/03p III/03p
the passage of an energy reform bill that provides for private investment
in that sector appears to have become increasingly remote. On this
occasion, neither the Fox government nor the ruling PAN can be
blamed, both of which are bending over backwards to negotiate with
the PRI after the lessons learnt from the failure of the fiscal reform.
Apart from the resistance in principle from the PRI, the approaching
INDUSTRIAL PRODUCTION
%, yoy
industry
elections to the House of Deputies in July 2003 are posing a problem
manufacturing
in that bipartisan acts of parliament are becoming even more difficult
20
to realize. This applies in particular if a broad majority of the population
15
opposes privatizations in the energy sector, as indicated by the outcome
of a recent opinion poll.
10
5
Economic activity: return to growth in the second quarter
In the first quarter, Gross Domestic Product fell by 2.0% year-on-year,
0
thus developing significantly worse than we had anticipated (estimate:
-5
Mar-99
Sep-99
Mar-00
Sep-00
Mar-01
Sep-01
Mar-02
0.1%). However, a significant share of this difference is based on
statistical reasons: unlike the preceding year, the Easter holidays this
time fell into the first quarter, reducing the number of working days by
four. Compared to the previous quarter, the Mexican economy,
seasonally adjusted, only contracted by 0.25% after the GDP decline
in the previous quarter had amounted to 0.61%. The latest indicators,
AUTOMOTIVE INDUSTRY
1000 units
production
domestic sales
such as export growth in April and the substantial increase in automotive
exports
200
production, likewise in April, also show that the economy has bottomed
out by now. We believe it will be possible to achieve a GDP increase
175
of 1.9% in the second quarter, in the early phase of the export-driven
150
upturn.
125
100
75
Monetary sector: trend reversal in monetary policy?
50
Contrary to the trend prevailing in the NAFTA partner country, the U.S.,
25
and in all other major industrialized nations, the Mexican central bank
0
Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Dec-01 Feb-02 Apr-02
has tightened its monetary policy to date. The reason for this is that
Banxico is in the midst of the predominantly difficult phase of an
42
Dresdner Bank Lateinamerika, Spotlight 6/2002, Mexico
MONETARY POLICY (CORTO)
ambitious disinflation process, in which even the latest recession left
absolutely no room for maneuver for a monetary policy designed to
boost economic activity. However, in April the central bank decided to
pesos mn
450
add 60 million pesos in liquidity to the banking system by lowering the
400
„Corto“, the principal instrument of Mexican monetary policy, from
350
360 million pesos to 300 million pesos. In our opinion this is merely a
correction of the Corto increase of February, which came in response
300
to the inflation-fueling discontinuation of the subsidization of electricity
250
rates. We do not believe that this step has led to a fundamental trend
200
reversal in monetary policy. The increase in consumer prices, at 4.7%
year-on-year in April, was still 0.2 of a percentage point above the
150
May-00
Nov-00
May-01
Nov-01
May-02
central bank’s inflation target for end-2002. On the one hand, the
disinflation process remains intact as reflected by the low rise in the
core inflation rate in the first two weeks of May, and the inflation target
is also likely to be undercut within the next several months. On the
other, Banxico will probably prefer to enter another difficult year (2003)
INFLATION (CPI)
with an appropriate „cushion“, in which 3% inflation is being targeted
rather than aggressively lowering the Corto in an economy that is
% yoy
% mom
2.8
20
already picking up momentum. This would mean that the short-term
interest rates (Cetes, 28 days), which have advanced since the
2.4
15
2
1.6
correction of the exchange rate from their all-time low (5.3% endApril), are likely to hover around their present level of 7% in the next
10
1.2
0.8
several months.
5
0.4
0
Foreign trade: exports picking up
In April Mexico’s exports rose by 8.7% after having fallen for eleven
0
Apr-99
-0.4
Oct-99
Apr-00
Oct-00
Apr-01
Oct-01
Apr-02
months in succession. Although the „Easter effect“ was also quite
noticeable in these figures, the seasonally adjusted trend nevertheless
clearly points upward. Not only the higher oil prices in comparison
with the previous year, but also a marked increase in demand (from
which at present the in-bond industry, or maquiladora, is benefiting in
INTEREST RATE
particular) is responsible for this development. The increase in imports
Interest rates (CETES 28d) %
by 6.4% shows that domestic demand has been stabilizing as well.
40
The higher oil prices ensured that the trade deficit in April, at US$ 557
35
million, was substantially lower than in the previous year.
30
In view of the ongoing economic recovery in the U.S., the outlook for
25
Mexican exports remains positive. In the year 2002 we anticipate a
20
slight increase on the previous year, which should then accelerate in
15
the year 2003. On the other hand, in the medium term a return to the
growth rates of the boom years (second half of the 1990s), when
Mexican exports grew by an average of 15 % annually, cannot be
real
nominal
10
5
0
Oct-98 Apr-99 Oct-99 Apr-00 Oct-00 Apr-01 Oct-01 Apr-02
expected. Competition from neighboring Central American states has
Dresdner Bank Lateinamerika, Spotlight 6/2002, Mexico
43
EXTERNAL TRADE
US$ bn
meanwhile increased substantially and China has become an even
exports
more attractive location for in-bond industries since that country joined
imports
18.0
the WTO. Without structural reforms on the labor market, the Mexican
16.0
export industry will soon reach its growth limits on account of the
14.0
potential lack of skilled workers.
12.0
Exchange rate: correction ñ no sustained depreciation!
10.0
In April the peso’s rally against the dollar in evidence since October
8.0
2001 came to an end; in previous weeks, on several occasions the
6.0
exchange rate had reached the mark of 9 pesos to the US$. Since
Sep-98 Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02
then the Mexican currency has lost approximately 7% of its value. We
believe that this is not the beginning of a sustained depreciation but
merely a correction. For instance, expectations of a sustained level of
capital inflows in the year 2002 had caused residents on the Mexican
forex market to establish speculative positions in favor of the peso.
FOREIGN DIRECT INVESTMENT
These were closed in April when disappointing trends in public finances
in the first quarter, a further escalation of the economic crisis in Argen-
US$ bn
tina and the increasing volatility on the international financial markets
16.0
brought about increased uncertainty. In addition, capital inflows in the
first quarter may have been slightly lower than expected. The position
12.0
will be clarified once the balance-of-payments data are released at
8.0
end-May. The figures announced in advance on direct investments,
at US$ 2.7 billion in the first quarter of 2002, represent a decline of
4.0
31% year-on-year.
However, there are several arguments to indicate that both direct
0.0
I/98
III/98
I/99
III/99
I/00
III/00
I/01
III/01
I/02
investments and inflows in the stock market will turn out relatively high
in the course of the year and a sustained devaluation of the peso
therefore is not on the agenda. Accordingly, as the U.S. economy
gains momentum, U.S. corporations should become interested in direct
investments in Mexico once again. An indicator for this was the sale at
the end of May of the state-owned insurer Ahisa to the U.S. company
EXCHANGE RATE
MetLife, which paid price significantly higher than the minimum bid.
10.2
Pesos/US$
As in the past, the valuation levels of Mexican stocks remain attractive.
10.0
And finally, the Mexican central bank would not permit a possible
9.8
exchange-rate related increase in inflationary expectations and would
9.6
consistently endeavor to reverse the tide of capital flows in Mexico’s
9.4
favor by tightening monetary policy. Accordingly, we maintain our
9.2
exchange-rate forecast of 9.30 pesos per US dollar for the end of the
9.0
year 2002.
8.8
May-00
44
Nov-00
May-01
Nov-01
May-02
Thorsten Rülle, Miami +1 305 810 3855
Bolko Schwanecke +49 40 3595 3605
Dresdner Bank Lateinamerika, Spotlight 6/2002, Mexico
MONTHLY AND QUARTERLY FIGURES
MEXICO: MONTHLY INDICATORS
Jan-02
Feb-02
Mar-02
Apr-02
next/latest
DOMESTIC ECONOMY
Economic activity index (IGAE)
% yoy
-2.0
-0.4
-3.5
25-Jun
% mom
0.8
0.5
-0.3
25-Jun
Industrial production
% yoy
-3.5
-1.8
-7.6
11-Jun
Manufacturing, in-bond industry
% yoy
-18.5
-17.3
-21.4
11-Jun
Manufacturing (excluding in-bond industry)
% yoy
-3.5
-1.2
-8.0
11-Jun
Construction
% yoy
-0.3
-0.2
-4.0
11-Jun
Gross fixed capital formation
% yoy
-4.1
-4.0
Retail sales
% yoy
0.4
-1.7
-2.2
20-Jun
Wholesale sales
% yoy
-10.1
-7.9
-13.7
20-Jun
IGAE index (seasonally adjusted)
Unemployment rate
Employees (social insurance)
Real wages per employee, manufacturing
7-Jun
%
3.0
2.7
2.8
% yoy
-0.7
-0.4
-0.2
2.2
2.8
19-Jun
21-Jun
% yoy
5.4
3.5
Budget balance, public sector
Pesos bn
1.9
-6.4
Public domestic debt
Pesos bn
783.5
803.6
30-May
US$ bn
82.7
82.3
30-May
Public external debt
26-Jun
30-May
Consumer prices
% yoy
4.8
4.8
4.7
4.7
7-Jun
Consumer prices
% mom
0.9
-0.1
0.5
0.6
7-Jun
Producer prices (excl. Services)
% yoy
2.1
1.8
1.7
2.0
7-Jun
Producer prices (excl. Services)
% mom
0.6
-0.1
0.7
0.4
7-Jun
% yoy
21.7
22.3
26.5
23.4
25-Jun
7.0
Money supply M1a
Treasury bills, Cetes 28d (latest: 05/21)
%
7.9
7.3
7.5
5.7
% yoy
1.8
1.7
1.1
1.3
Merchandise exports
US$ mn
11587
11925
13013
14456
24-Jun
Merchandise exports
% yoy
-9.9
-5.0
-8.5
8.9
24-Jun
Merchandise imports
US$ mn
12309
12665
13416
15014
24-Jun
Merchandise imports
% yoy
-10.8
-3.5
-10.2
6.4
24-Jun
Trade balance
US$ mn
-722
-741
-402
-557
24-Jun
Foreign exchange reserves (latest: 05/21)
US$ bn
47.2
47.1
46.2
45.2
45.1
Pesos
9.16
9.13
9.01
9.4
9.55
Q2 01
Q3 01
Q4 01
Q1 02
next/latest
-2.0
Comercial bank lending (excl. restructuring)
EXTERNAL SECTOR
US$ exchange rate (latest: 05/27)
MEXICO: QUARTERLY INDICATORS
DOMESTIC ECONOMY
GDP
% yoy
0.1
-1.5
-1.6
Private consumption
% yoy
4.1
1.6
1.5
15-Aug
14-Jun
Public consumption
% yoy
-3.2
-3.5
3.3
14-Jun
Private and public investment
% yoy
-6.9
-8.5
-9.8
14-Jun
Domestic demand
% yoy
0.3
-1.7
-0.4
14-Jun
Exports (goods and services)
% yoy
-1.7
-9.5
-10.9
14-Jun
Imports (goods and services)
% yoy
0.6
-8.0
-7.7
14-Jun
Current account balance
US$ bn
-3.7
-3.3
-5.8
Net foreign direct investment
US$ bn
4.3
14.6
2.4
Net foreign portfolio investment (incl. bonds)
US$ bn
0.6
0.3
-0.5
30-May
Capital account **
US$ bn
4.3
4.0
7.3
30-May
Change in foreign exchange reserves*
US$ bn
0.7
0.7
1.5
30-May
EXTERNAL SECTOR
30-May
2.7
26-Aug
* balance of payments ** incl. residual items
Dresdner Bank Lateinamerika, Spotlight 6/2002, Mexico
45
PERU: DELAYED REFORMS
Area
Population
1 285 215 sq. km
25.7 million (+ 2% p.a.)
State president
Finance minister
Central bank president
Alejandro Toledo Maurique
Pedro Pablo Kuczynski
Richard Duarte Webb
Next elections
State president: 2006
Parliament: 2006
GDP per capita
US$ 2 132 (2001)
Investment
Savings
18% of GDP (2000)
18% of GDP (2001)
Exchange rate system
Monetary policy
Flexible echange rate
Inflation targeting
Exports (2001)
Purchasing countries
Products
13% of GDP
USA 28%, EU 21%, Switzerland 8%
Gold 17%, fishing products 14%, copper 14%
Imports (2001)
Supplier countries
Products
13% of GDP
USA 23%, EU 14%, Japan 6%, Colombia 6%
Capital goods 30%, consumer goods 20%,
energy sources 16%
Rating:
Moody’s: Ba3
S&P: BB-
SUMMARY AND OUTLOOK
The beginning of the year saw good signs for Peru. By strengthening democratic structures, the country managed to
harness widespread support from both multilateral institutions and various governments of industrial countries. The
prospects of speedy reforms of the taxation system, the resumption of the privatization program as well as an
international bond issue boosted the inflow of private capital to Peru. However, in recent months the government has
failed to convince the majority of the country’s political forces of the benefits of an orthodox economic policy.
Opposition to the government’s policy is growing, which is delaying important reforms and increasingly casting
doubt on the implementation of several privatization projects.This year the weak trend in the private sector should
partly be offset by an expansionary fiscal policy. The delay of important reforms holds the risk, however, that Peru will
not be able to exploit its high growth potential in the next several years.
46
Dresdner Bank Lateinamerika, Spotlight 6/2002, Peru
ANNUAL FIGURES AND FORECASTS
PERU
1999
2000
2001
2002f
2003f
0.9
3.1
0.2
3.0
3.9
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
51.7
53.5
54.8
56.3
58.3
Inflation (year-end)
%
3.7
3.7
-0.1
2.1
2.4
Inflation (average)
%
3.5
3.8
2.0
0.5
2.3
PUBLIC SECTOR
Budget balance, central government
% GDP
-2.7
-3.1
-2.3
-2.7
-2.4
Budget balance, public sector
% GDP
-3.1
-3.2
-2.4
-2.9
-2.4
Public debt
% GDP
44
42
42
43
42
Amortization
US$ bn
0.87
1.26
1.10
1.17
1.10
Gross financing needs
US$ bn
2.47
2.98
2.42
2.80
2.50
Merchandise exports
US$ bn
6.1
7.0
7.1
7.3
7.9
Merchandise imports
US$ bn
6.7
7.3
7.2
7.0
7.4
Trade balance
US$ bn
-0.6
-0.3
-0.1
0.2
0.6
Current account balance
US$ bn
-1.9
-1.6
-1.1
-0.8
-0.9
Current account balance
% GDP
-3.7
-3.1
-2.0
-1.5
-1.6
Net foreign direct investment
US$ bn
2.3
0.7
1.1
1.5
1.7
Foreign exchange reserves, year-end
US$ bn
8.4
8.2
8.6
9.7
10.4
Import cover
months**
9.0
8.2
8.8
10.2
10.4
US$ exchange rate, year-end
Soles
3.51
3.52
3.44
3.58
3.62
US$ exchange rate, average
Soles
3.38
3.49
3.48
3.51
3.60
Gross foreign debt
US$ bn
30.9
31.8
33.1
34.0
34.5
Foreign debt
% exports**
325
330
351
369
359
Short-term foreign debt
US$ bn
4.6
4.0
4.2
4.5
4.3
EXTERNAL SECTOR
FOREIGN DEBT
Foreign debt amortization
US$ bn
2.3
2.2
2.3
2.3
2.3
Foreign debt service
US$ bn
4.1
4.0
4.2
4.3
4.5
Foreign debt service
% exports**
46
42
45
46
47
9.0
FINANCIAL MARKETS (year-end)
Interbank interest rate (av)
%
IGBVL stock index (sol based, 2002: 05/27)
IFCI stock index (US$ based, 2002: 05/27)
Bond market yield spread (2002: 05/27)*
*EMBI+
bp
16.9
11.4
3.1
6.0
1836
1208
1163
1234
161
116
128
155
443
687
520
513
**goods and services
Dresdner Bank Lateinamerika, Spotlight 6/2002, Peru
f=forecast
47
TOLEDO´S POPULARITY
Domestic policy: increasing resistance
The orthodox forces in the government, first and foremost finance
%, monthly poll taken by APOYO (August 01 until Mai 02)
minister Kucyznski, has met with increased criticism over the past
100
few months. Three factors motivated the opposition in Congress
80
55
65
60
59
69
and the representatives of the rural regions to do so. Firstly, a revi-
57
talization of the domestic economy has failed to materialize so far.
42
40
30
The official unemployment rate remained at a high level of 11% in
36
33
27
25
22
16
20
April and dissatisfaction with the economic situation is growing,
22
13
8
12
9
particularly among the poorer population. Secondly, by criticizing
the government’s policy more sharply the opposition is trying to
0
approve
disapprove
no opinion
improve its own chances of winning the forthcoming regional elections scheduled for November 17. And finally, the regional interest
groups are using the already strong disapproval of the government’s
privatization plans among the population for their own agenda. The
regional representatives hope that the regions could benefit directly from a portion of the proceeds if privatizations are postponed
PUBLIC BUDGET BALANCE
until after the elections. At present the total proceeds go to the
% of GDP
consolidated public sector
central government
2
central government.
While finance minister Kuczynski – the liberal force in the cabinet
1
in economic policy terms – ultimately managed to successfully
0
ward off impeachment proceedings and denied rumors of his forthcoming resignation, we nevertheless expect the influence of the
-1
orthodox forces to subside in the course of the year and populist
measures will gain the upper hand in the run-up to the elections.
-2
-3
I/96
I/97
I/98
I/99
I/00
I/01
I/02
Fiscal policy: budget deficit higher than expected
In view of the high public sector debt (42% of GDP) and the expansionary fiscal policy in the last years of the Fujimori government,
the speedy reduction of the budget deficits is one of the central
agreements of the current IMF program. The agreement with the
Monetary Fund calls for a reduction of the deficit from 2.5% of GDP
BUDGET OF CENTRAL GOVERNMENT
%, J/J
20
current revenues
last year to 1.9% - 2.2% in 2002. This target should be attainable in
current expenditures
particular by raising the tax rate, but also by imposing budget cuts.
While the budget deficit of the consolidated state sector in the first
15
quarter was still within the agreed targets at 1.5% of GDP, the pub-
10
lic-sector budget traditionally balances at the beginning of the year.
5
In view of the weak economic development the government should
0
find it difficult to improve the revenue situation in the near future. On
the spending side, the strong opposition as well as last year’s elec-
-5
tion campaign promises are making drastic measures more diffi-10
I/99
III/99
I/00
III/00
I/01
III/01
I/02
cult. This is substantiated by an ongoing debate for some months
now concerning the tax legislation reform and the increase in teach-
48
Dresdner Bank Lateinamerika, Spotlight 6/2002, Peru
GDP CHANGE (REAL)
ers’ salaries under discussion right now. The forthcoming visit of an
IMF delegation (the mission begins on June 10) could accelerate
the reform process; we have nevertheless increased our forecast
for this year’s budget deficit from 2.4% to 2.9% of GDP.
%, yoy
6
5
4
3
Economic policy: Privatizations in jeopardy
2
Officially, the government anticipates revenues from privatizations
1
to run into US$ 700 million this year. The lion’s share of these revenues (approx. US$ 500 million) should be generated from sales of
energy utilities and providers. In view of heavy protests and cancel-
0
-1
-2
-3
II/99 IV/99 II/00 IV/00 II/01 IV/01f II/02f IV/02f II/03f IV/03f
lations by some bidders, the auctions of these enterprises originally scheduled to take place between April and June have been
postponed several times. While the likelihood of a partial implementation of privatizations has increased after the central government made concessions toward representatives of the provinces,
and although the government has announced that it would give
DEMAND COMPONENTS
privatizations in the mining industry priority to counteract possible
shortfalls or postponements in the energy sector, we now assume
nevertheless that the privatization proceeds will only reach US$
500 million (previously US$ 800 million) this year.
%, yoy
15
priv. consumption
priv. investment
exports
10
5
Economy: pessimism was justified
0
The economic figures in the first quarter were disappointing. Only
the mining and construction sectors recorded substantial growth,
with GDP increasing by 3% year-on-year. The construction industry
-5
-10
continues to be stimulated by repairs of earthquake damage as
I/01
II/01
IIII/01 IV/01
I/02
II/02p IIII/02p IV/02p
well as public infrastructural measures, while growth in the mining
industry continues to be supported by the mega project Antamina.
Both non-recurring effects will recede at the end of the year, which
means that only a revitalization of the domestic economy on a
broader scale could contribute to a further increase in growth.
INFLATION
However, signs of this happening are bleak. While growth in private
consumption in the first quarter, at 2% year-on-year, exceeded our
%, yoy
4
Core Inflation
CPI
expectations (1.0%), investments simultaneously decreased by
5.7% year-on-year, thus falling more sharply than we had predicted.
3
Restoring investor confidence, however, is exactly the precondi-
2
tion for the accelerated upturn anticipated by government – which
1
forecast a growth rate of 3.5% to 4% this year. However, we assume
that the level of investment year-on-year will only increase in the
fourth quarter.
The trend in the private sector, which is slightly weaker than expected, should be evened out by an expansionary fiscal policy,
Dresdner Bank Lateinamerika, Spotlight 6/2002, Peru
0
-1
-2
Apr-01
Aug-01
Dec-01
Apr-02
49
TERMS OF TRADE
Index (Jan 2000 = 100)
105
which means that our forecast for this year remains unchanged at
export prices
3.0%.
import prices
Inflation: risk of deflation averted?
100
Following a decrease in year-on-year consumer prices by more
95
than 1 percentage point each month since the beginning of 2002,
90
the inflation rate turned positive again in April for the first time
(+0.1%). Prices of non-tradable goods in particular saw a substan-
85
tial increase again year-on-year (0.7%). We continue to believe
that the inflation rate – fueled by a more expansionary orientation in
80
Feb-00
Jun-00
Oct-00
Feb-01
Jun-01
Oct-01
Feb-02
terms of both fiscal and monetary policy – will increase in the course
of this year and reach a level of 2.1% year-on-year at end-2002.
Current account: preference agreement expired
The reduced customs duties agreed within the scope of the ATPA
(trade agreement between the U.S. and the Andean states of Peru,
EXTERNAL SECTOR
Ecuador, Bolivia and Colombia) expired on May 16 after resistance
US$ mn
2500
exports
imports
balance
in the U.S. Congress had rendered an extension impossible. While
an extension of the agreement is likely toward the end of the year,
2000
there will probably be a short-term impact on Peru’s exports, seeing
1500
as 28% of Peru’s total exports go to the U.S. This negative influence
1000
is being offset by the recent noticeable surge in gold prices (gold
500
exports account for approx. 16% of total exports). We anticipate a
0
slight improvement in the terms of trade in the course of the year
-500
and continue to assume – to some extent, on account of the weak
-1000
II/98
IV/98
II/99
IV/99
II/00
IV/00
II/01
IV/01
import trend – that the trade balance will even out for the year as a
whole. In the first quarter, exports declined by 5.3% year-on-year,
while imports were 12.5% below the previous year’s level. The current account deficit should decrease to US$ 800 million.
Capital account: expected decline in capital inflows
BOND YIELD SPREAD
Significant expectations associated with the new government’s ecoEMBI+
bps
nomic policy and prospects of affirming the economic upturn re-
890
sulted in increased capital inflows in the first quarter. This contrib-
790
uted to a marked reduction of risk premiums on Peruvian bonds.
This development was accompanied by a high inflow of direct in-
690
vestments. We fear, however, that the stagnating reforms and the
absence of the expected upturn already reflected in increased bond
590
spreads will result in lower capital inflows.
490
390
May-01
50
Jul-01
Sep-01 Nov-01
Jan-02 Mar-02 May-02
Kai Stefani +49 40 3595 3486
Dresdner Bank Lateinamerika, Spotlight 6/2002, Peru
MONTHLY AND QUARTERLY FIGURES
PERU: MONTHLY INDICATORS
Jan-02
Feb-02
Mar-02
% yoy
3.9
3.4
1.6
Apr-02
next/latest
DOMESTIC ECONOMY
Economic activity index
Economic activity index (s.a.)
12-Jun
% mom
-0.4
0.4
1.2
14-Jun
Industrial production
% yoy
1.5
0.3
-4.3
14-Jun
Tax revenues (central government)*
% yoy
4.3
-14.1
-9.6
Cement Sales (ASOCEM)*
% yoy
14.0
11.6
23.7
Construction sector
% yoy
15.6
13.0
2.6
14-Jun
Fishing sector
% yoy
-6.0
-22.3
-23.9
14-Jun
12-Jun
15.3
17-Apr
Trade index*
% yoy
1.9
0.3
-0.9
14-Jun
Employment index (1994=100)
% yoy
1.5
1.9
2.0
14-Jun
Consumer prices
% yoy
-0.8
-1.1
-1.1
0.1
2-Jun
Consumer prices
% mom
-0.5
-0.6
0.0
0.0
2-Jun
Core inflation
% yoy
0.5
0.5
0.4
0.1
3-Jun
Core inflation
% mom
-0.1
-0.1
0.0
0.2
3-Jun
Money supply M1
% yoy
10.3
11.0
12.9
7.4
14-Jun
Loan rates in US$ (TAMEX, latest: 05/21)
%
9.9
9.9
10.1
10.1
10.0
Deposit rates in US$ (TIPMEX, latest: 05/21)
%
2.0
1.8
1.7
1.6
1.6
Net credit of the Financial sector
US$ bn
8.0
7.9
8.0
7.9
3-Jun
Deposits in foreign currencies
US$ bn
6.0
6.0
5.9
5.8
3-Jun
%
70.2
50.0
50.0
50.0
3-Jun
US$ mn
519.6
500.4
554.6
512.4
12-Jun
12-Jun
Share of Deposits in foreign currency
EXTERNAL SECTOR
Merchandise exports
Merchandise exports
% yoy
-7.3
-9.5
1.0
-5.0
Merchandise imports
US$ mn
580.7
528.1
507.8
514.7
12-Jun
Merchandise imports
% yoy
-2.4
-18.7
-16.0
-12.0
12-Jun
Trade balance
US$ mn
-61.1
-27.7
46.8
Foreign exchange reserves (latest: 05/15)
US$ bn
8.67
9.03
8.79
9.10
9.27
Soles
3.47
3.46
3.44
3.43
3.46
Q2 01
Q3 01
Q4 01
Q1 02
-0.8
1.2
3.0
3.0
7-Aug
16-Aug
US$ exchange rate (latest: 05/27)
PERU: QUARTERLY INDICATORS
12-Jun
next/latest
DOMESTIC ECONOMY
GDP
% yoy
Private consumption
% yoy
1.5
1.2
1.4
2.0
Public consumption
% yoy
-3.0
0.5
7.1
3.7
16-Aug
Private and public investment
% yoy
-10.4
-6.9
-6.3
-3.5
16-Aug
Domestic demand
% yoy
-1.2
-0.3
0.6
1.0
16-Aug
Exports (goods and services)*
% yoy
3.0
13.2
8.7
5.4
16-Aug
Imports (goods and services)*
% yoy
0.7
4.7
-4.7
-5.9
16-Aug
Budget balance, public sector
% of GDP
-2.4
-2.8
-5.6
-1.5
16-Aug
US$ bn
18.9
19.4
19.0
19.1
16-Aug
Current account balance
US$ mn
-308
-144
-223
-343
16-Aug
Net foreign direct investment
US$ mn
82
313
430
224
16-Aug
Portfolio investment
US$ mn
7
-4
-190
-311
16-Aug
Capital account**
US$ mn
530
444
180
445
16-Aug
Change in foreign exchange reserves
US$ mn
230
338
-66
174
16-Aug
Gross foreign debt
US$ bn
27.7
27.9
27.4
27.5
16-Aug
Short-term foreign debt
US$ bn
3.4
3.1
3.1
3.1
16-Aug
Public foreign debt
EXTERNAL SECTOR
*real
** incl. residual items
Dresdner Bank Lateinamerika, Spotlight 6/2002, Peru
51
URUGUAY: WITHOUT INVESTMENT GRADE
Aera
Population
174 800 sq.km
3.4 million (+ 0.7% p.a.)
State president
Finance minister
Central bank president
Jorge Batlle
Alberto Bensión
César Rodríguez Batlle
Next elections
State president: May 2004
Parliament: May 2004
GDP per capita
US$ 5 585 (2001)
Rating
Moody’s: Ba2
S&P: BB-
ANNUAL FIGURES AND FORECASTS
URUGUAY
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
-2.8
-1.4
-3.1
-3.7
1.8
GDP
US$ bn
20.9
20.1
18.7
14.0
11.8
Inflation (year-end)
%
4.2
5.1
3.6
11.5
9.0
Inflation (year-average)
%
5.7
4.8
4.4
7.7
10.0
Budget balance, public sector
% GDP
-4.1
-4.0
-4.2
-3.5
-3.8
Merchandise exports
US$ mn
2291
2384
2140
2210
2470
Merchandise imports
US$ mn
3186
3312
2910
2630
2760
Trade balance
US$ mn
-895
-928
-770
-420
-290
Current account balance
US$ mn
-507
-523
-480
-300
-190
Current account balance
% GDP
-2.4
-2.6
-2.6
-2.1
-1.6
Net foreign direct investment
US$ mn
238
285
319
150
350
Foreign exchange reserves, year-end
US$ mn
2081
2479
3097
2000
2200
Import cover *
months
5.1
5.8
8.2
5.9
6.1
US$ exchange rate, year-end
Pesos
11.6
12.5
14.1
22.9
25.5
US$ exchange rate, average
Pesos
11.3
12.1
13.3
18.4
24.5
EXTERNAL SECTOR
FOREIGN DEBT
52
Gross foreign debt**
US$ bn
8.2
8.6
9.0
9.7
9.7
Foreign debt**
% exports*
191
192
224
259
236
Short-term foreign debt**
US$ bn
3.8
3.3
3.2
3.7
3.5
Foreign debt service
US$ bn
0.9
0.9
0.9
0.9
1.1
Foreign debt service
% exports*
21
20
23
24
* goods and services
** excl. deposits of foreigners
Dresdner Bank Lateinamerika, Spotlight 6/2002, Uruguay
27
f=forecast
SUMMARY AND OUTLOOK
Domestic policy: increased risk of contagion from Argentina
In line with the ongoing crisis in Argentina, the macro-economic situation in Uruguay has deteriorated significantly over the past several
months. After GDP had declined by 3.1% in 2001, at present the economy
continues to be sluggish, and we anticipate a further drop of around
3.7% this year. In reaction to the stronger devaluation trend, the inflation
rate has increased substantially following a low in 2001 (year-end:
3.6%) and will presumably finish the year 2002 at 11.5%. Against the
backdrop of the recession phase under way for more than three years
now and the rigid spending structure of the state sector, which resulted
in a budget deficit of 4.2% of GDP in 2001, the debt ratio reached about
54% of GDP at the end of last year (1998: approx. 35%). Assuming that
the government will once again fail to meet the budget deficit limit of
In the wake of the Argentinean crisis the economic
situation has deteriorated significantly since the
beginning of the year and resulted in the loss of the
country’s „investment grade“ status. Against the
backdrop of the continuous reduction of foreign
currency reserves, the approval of multilateral loans
minimizes the risk of the country’s insolvency in
the short term. The question remains, however,
whether renewed financial aid from the IMF will be
able to stop or curb the outflow of deposits and
thus avert a banking crisis.
2.5% of GDP agreed with the IMF (forecast 2001: -3.5%) in spite of the
austerity and tax measures announced since the beginning of the year,
the international rating agencies revoked the country’s investment grade
status. Further downgrades might follow. In the short term the financing
requirements of the public sector (amortization of debt + budget deficit)
DEPOSITS & FOREIGN EXCH. RESERVES
should be met without any major problems following the approval of an
IMF facility of US$ 742 million in March and additional funds promised
by the IMF and other multilateral lenders (totaling US$ 3 billion according to the local media). The medium-term consolidation of the public
finances continues to pose a challenge, however.
Deposits, US$ bn
Forex reserves, US$
16
4
12
3
8
2
4
1
External sector: tense foreign exchange situation
Following the free float of the Argentine peso and the downgrading of
Uruguayan foreign debt, the Uruguayan peso has come under increasing pressure over the past few months. The average risk premium on
0
Uruguayan government bonds has increased accordingly, from 200
Jan-00
0
Oct-00
Jul-01
Apr-02
bp at the beginning of the year to almost 1300 bp at times. Increasing
liquidity squeezes in the banking system also contributed to these developments after a continuous outflow of savings deposits (JanuaryApril 2002: -30%), of Argentinean investors in particular, was recorded
and the country’s largest private bank, Banco Comercial, made head-
EXCHANGE RATE AND BOND SPREAD
lines because of its involvement in a fraud scandal. Due to the drain on
deposits, the country’s foreign currency reserves decreased by half, to
Pesos/US$
yield spread (República AFAP), bps
1400
18
US$ 1.57 billion in the first four months. Despite the increased speed of
1200
devaluation to 33% p.a. and the expanded bandwidths from 6% to
12%, since April the peso has been testing the ceiling of the foreign
1000
16
800
exchange band (depreciation from the beginning of the year to May 21:
15%) and indicates that a further acceleration in depreciation or a
600
14
400
change in the country’s exchange-rate regime may be on the cards.
200
12
Christine Thomas do Prado + 55 11 5188 6968
Dresdner Bank Lateinamerika, Spotlight 6/2002, Uruguay
Jan-02
0
Mar-02
May-02
53
VENEZUELA: TIGHT BUDGET SITUATION
Area
Population
912 050 sq. km
24.7 million (+ 2.2% p.a.)
State president
Finance minister
Central bank president
Hugo Chávez Frías
Tobías Nóbrega
Diego Luis Castellanos Escalona
Next elections
State president: 2006
Parliament: 2006
GDP per capita
US$ 5 320 (2001)
Investment
Savings
18% of GDP (2000)
30% of GDP (2000)
Exchange rate system
Monetary policy
Flexible exchange rate
Inflation targeting
Exports (2000)
28% of GDP
Purchasing countries (1999) USA 51%, Brazil 5%, Colombia 4%
Products
Crude Oil and derivatives 84%,
metals and metal goods 5%
Imports (2000)
Supplier countries
Products (1999)
13% of GDP
USA 39%, Colombia 7%, Brazil 5%
Raw materials 54%, machinery and
equipment 26%
Rating:
Moody’s: B2
S&P: B
SUMMARY AND OUTLOOK
The failed coup in April that saw president Chávez stripped of his power for 48 hours should have convinced the opposition
that it is still too divided and too weak to oust Chávez from office prematurely. On the other hand, the president will have
realized that he can only remain in power if the economy does not slide downhill any further. By manning the economic
ministry with experts approved by the business community, a course of greater consistency in economic policy is more likely
to result. Concrete measures are still lacking, however, and the starting position is unfavorable. For instance, GDP unexpectedly
saw a marked decline by 4.2% year-on-year in the first quarter. We have revised our growth forecast for 2002 downward from
–3.3% to –4.3%. A matter of concern is the ongoing capital exodus, which contributed to the decline in international reserves
by more than US$ 3 billion in the first quarter. This year capital flight most probably will exceed double the amount of the
surplus of US$ 4.9 billion that we expect to be recorded in the current account.
54
Dresdner Bank Lateinamerika, Spotlight 6/2002, Venezuela
ANNUAL FIGURES AND FORECASTS
VENEZUELA
1999
2000
2001
2002f
2003f
DOMESTIC ECONOMY
GDP change (real)
%
GDP
US$ bn
-6.1
3.2
2.7
-4.3
1.0
103.3
121.3
124.9
98.4
89.5
Inflation (year-end)
%
20.0
13.4
12.3
34.0
19.0
Inflation (average)
%
23.6
16.2
12.5
25.7
23.8
% GDP
-1.6
-1.6
-4.3
-4.5
-4.2
Budget balance, public sector
% GDP
0.7
4.3
-4.4
-4.1
-3.7
Public debt
% GDP
26
25
28
32
37
Amortization
US$ bn
6.0
5.9
6.8
n.a.
n.a.
Gross financing needs
US$ bn
5.0
0.7
12.3
n.a.
n.a.
US$ bn
20.8
33.0
26.8
25.6
25.9
Merchandise imports
US$ bn
13.2
15.5
17.4
15.6
16.0
Trade balance
US$ bn
7.6
17.5
9.4
10.0
9.9
Current account balance
US$ bn
3.6
13.1
4.1
4.9
4.5
Current account balance
% GDP
3.5
10.8
3.3
5.0
5.0
Net direct investment
US$ bn
2.8
4.4
2.6
1.0
2.0
Foreign exchange reserves, year-end **
US$ bn
12.3
13.1
9.2
5.9
5.6
Import cover **) ***)
months
7.2
6.6
4.2
3.0
2.7
PUBLIC SECTOR
Budget balance, central government
EXTERNAL SECTOR
Merchandise exports
US$ exchange rate, year-end
Bolívares
648
700
763
1160
1400
US$ exchange rate, average
Bolívares
606
680
724
1020
1285
Gross foreign debt
US$ bn
37.0
34.1
33.0
34.0
34.8
Foreign debt
% exports ***
152
92
107
114
115
Short-term foreign debt
US$ bn
7.5
7.1
6.7
7.0
7.4
Foreign debt amortization
US$ bn
3.7
3.4
2.8
3.1
3.3
Foreign debt service
US$ bn
6.4
6.1
4.9
5.1
5.5
Foreign debt service
% exports ***
26
16
16
17
18
17.3
13.5
19.5
35.0
20.0
ICB stock index (bolívar based, 2002: 05/27)
5418
6825
6570
7369
IFCG stock index (US$ based, 2002: 05/27)
243
308
246
203
844
958
1128
858
FOREIGN DEBT
FINANCIAL MARKETS (year-end)
Deposit rate, 90 days
Bond market yield spread (2002: 05/27)*
* EMBI+ ** Central bank only, without FIEM
%
bp
*** goods and services
Dresdner Bank Lateinamerika, Spotlight 6/2002, Venezuela
f=forecast
55
GDP CHANGE (REAL)
Domestic policy: political crisis continues to smolder
In April the dissatisfaction with President Chávez escalated when proChávez-supporters took over the management of the oil company
PDVSA. A general strike was followed by riots claiming at least 17 lives.
Ultimately, military units removed President Chávez from office for about
%, yoy
10
8
6
4
48 hours. The power situation has not become any clearer. The opposition, which was unable to take advantage of its unique opportunity,
emerged debilitated from this encounter and can only try – in particular
since the military continues to be divided – to remove the president from
2
0
-2
-4
-6
-8
-10
II/98
I/99
IV/99
III/00
II/01
I/02
IV/02f
III/03
ers. According to Datanálisis the approval ratings for Chávez’ policy
barely reached 34% in February 2002. This could have been one of the
reasons for the initial willingness he indicated after his return to office to
be more accommodating toward the country’s opposition. He launched
BUDGET BALANCE
% of GDP
public sector
central government
5
4
3
2
1
a committee for national dialog and appointed the incumbent OPEC
Secretary-General Ali Rodriguez, a well-respected personality, to the
board of PDVSA. Chávez has also reshuffled his Cabinet, with marketoriented economic experts (who are also accepted by the business
community since they can be expected to deliver greater consistency
with regard to economic measures) being placed in the three economic ministries (finance, planning as well as trade and industry).
Diosdado Cabello, a loyal Chávez supporter, was appointed minister of
0
-1
-2
-3
-4
-5
1999
2000
2001
2002f
2003f
%
the interior and justice. He is also in charge of the Bolivarian circles,
which support the Bolivarian revolution of the president. In the wake of
the incidents of April they have gained new followers and now account
for 130,000 (formerly 80,000) members.
We are under the impression that the president is pursuing the announced reconciliation with the opposition only half-heartedly and that
strengthening his power base still remains his primary objective. The
INTEREST RATE
deposits
credits
National Dialog is not making any headway because numerous important interest groups – among them the trade union umbrella organization CTV and the trade association Fedecámaras - are not represented
on the committee. The military saw a substantial number of its leaders
80
70
60
50
being replaced by lower-ranking Chávez supporters. Conclusion: President Chávez largely continues to adhere to the existing policy. However, his replacements in the economic ministries indicate that at this
stage he is prepared to make concessions at least in terms of eco-
40
30
20
10
0
nomic policy.
Jan-01
56
office by legal means. It seeks a reduced presidential term of office from
6 to 4 years or to vote him out of office mid-term. President Chávez had
to realize that the discrepancy between his promises and the actual
economic situation has drastically reduced the number of his support-
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Dresdner Bank Lateinamerika, Spotlight 6/2002, Venezuela
INFLATION
Fiscal policy: rapidly growing budget deficit
The high oil prices – at US$ 19.2/b they have markedly exceeded the
revised budget estimate of US$ 16 per barrel in the course of the year –
have softened the budgetary crisis of the public sector. The liquidity
situation is so tense that the government increasingly fails to meet its
payment obligations. Contributory factors are the failure to implement
the 7% expenditure cut announced in February and the fact that oil
exports saw a temporary setback due to the disputes arising in connection with the PDVSA leadership. A 20% wage increase constitutes an
additional burden on the budget. Finance minister Nobrega was correct in realizing that countermeasures can no longer be put off if an
increase in the central government’s deficit to more than US$ 7 billion is
to be averted. Financing the deficit is also becoming more and more
%
retail prices
wholesale prices
30
25
20
15
10
5
Jan-01
Apr-01
Jul-01
difficult for Venezuela. Due to the high country risk, international bond
markets call for risk spreads of about 850 bp, and on the domestic
market it has virtually become impossible to place government bonds
despite the high interest rates (the last time still in the region of 33% for
3-month instruments). This is because, due to the decline in deposits
(April: -12% compared to the beginning of the year) and the increasing
share of bad debts (March 2002: 7.5% of receivables), as a result of the
long phase of high interest rates the liquidity of banks is decreasing
steadily. Due to the fact that the central government has already made
full use of its share it is denied renewed access to the reserves of the
FIEM stabilization fund. For this reason finance minister Nobrega plans
to also approach multilateral banks such as the World Bank, the InterAmerican Development Bank (IDB) and the Andean Development
Corporation (CAF) to secure US$ 3 – 3.5 billion in financing. The procurement of capital is to be facilitated by negotiating a new consultation agreement with the International Monetary Fund. In order to boost
Oct-01
Jan-02
BOND YIELD SPREAD
EMBI+
bps
1400
1200
1000
800
600
May-00
Nov-00
May-01
Nov-01
state revenues, the government is considering an increase in valueadded tax (currently 14.5%) by 2 percentage points, an increase in the
subsidized petrol prices and a gradual phase-out of various tax benefits. Since we are not convinced yet that Nobrega will also be able to
implement his measures, we maintain our forecast of the central
government’s deficit of 4.4% of GDP based on the assumption of an
average oil price of US$ 20 per barrel and a 4.3% contraction in GDP.
Apr-02
May-02
OIL PRICE
US$/b
Venezuela oil basket
WTI
30
26
Economy: still no light at the end of the tunnel
The anti-investment economic policy, reduced oil production, high interest rates as well as heavy price hikes of inputs and increased foreign
debt service due to the depreciation of the bolívar (more than 20% by
the end of May since going into free float in February) have severely
22
18
14
May-01
Dresdner Bank Lateinamerika, Spotlight 6/2002, Venezuela
Aug-01
Nov-01
Feb-02
May-02
57
FOREIGN EXCHANGE RESERVES
US$ bn
total
central bank
hampered the economy. Nevertheless, the GDP shrinkage in the first
quarter of this year by 4.2% year-on-year came as a negative surprise
stabilization fund
14
for us. Since the April incidents will most probably have repercussions
on the investment climate in the second and third quarters, an increase in minimum wages by 20% has to be absorbed and the state
will presumably raise the tax burden accordingly, we now anticipate a
12
decrease in GDP by 4.3% (previously 3.3%).
(gold incl.)
20
18
16
10
8
Inflation: rate continues to rise
The annual inflation rate rose to 18.7% in April as a result of the strength-
6
4
Nov-01
Dec-01
Jan-02
Feb-02
Mar-02
Apr-02
May-02
est rates. In return it accepts that the bolívar continues to depreciate
steadily in real terms and only intervenes in a targeted support of the
exchange rate when the domestic currency comes under massive
pressure from private capital outflows, which in light of the uncertain
CURRENT ACCOUNT BALANCE
US$ bn
ening of the dollar by more than 30% in the course of the year and the
step-by-step relaxation of the restrictive monetary policy, which is supposed to reduce interest rates. In view of the poor economy, the central
bank will most probably continue to work towards a reduction of inter-
% of GDP
14
12
12
10
10
8
political outlook and the absence of a fundamental reorientation of
economic policy will continue to be the case in future. Our assumption
that the inflation rate will exceed 30% by year-end remains unchanged.
8
6
6
4
4
2
2
0
0
1999
2000
2001
2002f
2003f
External sector: recession diminishes import requirements
The decline in import demand is likely to continue due to cyclical and
exchange-rate related factors and the outlook for oil prices has markedly improved again – the average price for the year should, as in
2001, be in the region of US$ 20 per barrel. We expect the current
account to reflect a surplus of US$ 4.9 billion (previously US$ 5.6
billion) for 2002 as a whole, following the disappointing results in the
first quarter of this year (+ US$ 0.1 billion compared to +US$ 2.4 billion
in the first quarter of 2001).
EXCHANGE RATE
1100
Exchange rate: central bank saves its foreign currency reserves
In the aftermath of the incidents of April, which reignited capital flight,
Bolivares/US$
the bolívar has come under sustained pressure once again. As the
central bank is now reluctant to intervene, the US$ exchange rate has
risen again to more than 1000 bolívares. The central bank’s reserves
have been spared, however. In spite of the negative effects of the coup
1000
900
800
attempt, they still remain at their level of end-March. Reserves, including those of the FIEM stabilization fund (incl. gold) currently add up to
US$ 15.2 billion.
700
600
May-00
58
Nov-00
May-01
Nov-01
May-02
Bolko Schwanecke +49 40 3595 3605
Dresdner Bank Lateinamerika, Spotlight 6/2002, Venezuela
MONTHLY AND QUARTERLY FIGURES
VENEZUELA: MONTHLY INDICATORS
Jan-02
Feb-02
Mar-02
Apr-02
-30.3
19.2
next/latest
DOMESTIC ECONOMY
Industrial production (private sector)
% yoy
Car sales
% yoy
55.3
20.2
%
16.4
15.0
Consumer prices
% yoy
12.3
13.7
17.6
18.7
3-Jun
Consumer prices
% mom
0.9
1.8
4.2
2.1
3-Jun
Producer prices
% yoy
6.3
9.9
19.0
20.2
Producer prices
% mom
0.4
3.5
8.9
1.6
Money supply M2 (latest: 05/03)*
Bolívar bn
16107
15026
14721
14521
Money supply M2 (latest: 05/03)*
% yoy
3.1
-2.9
-3.6
-4.2
-3.0
Lending rate (latest: 05/13)*
%
35.2
60.9
50.9
48.5
38.0
Deposit rate (latest: 05/13)*
%
24.3
26.4
52.7
38.7
33.0
Unemployment rate
Interbank interest rate (latest: 05/27)*
Credit volume (latest: 05/03)*
Credit volume (latest: 05/03)*
8-Jun
14736
%
26.0
51.4
50.7
22.1
16.4
Bolívar bn
9128
8789
8282
8231
8198
% yoy
18.0
9.8
6.1
2.8
2.5
Deposits (latest: 05/03)*
Bolívar bn
14257
13513
12678
12912
12999
Deposits (latest: 05/03)*
% yoy
5.7
-3.9
-8.1
-4.8
-4.4
Oil price (Venezuelan exports, latest: 05/24)
US$/barrel
15.82
16.31
20.25
21.34
23.52
Oil price (Venezuelan exports, latest: 05/24)
% yoy
-31.8
-27.4
0.2
-4.3
4.0
6.58
EXTERNAL SECTOR
Foreign exchange reserves (CB, latest: 05/27)*
US$ bn
7.58
6.63
6.16
6.63
Forex reserves (FIEM***, latest: 05/27)*
US$ bn
6.20
5.70
5.73
5.30
5.30
Bolívares
764
1060
891
843
1010
Q2 01
Q3 01
Q4 01
Q1 02
next/latest
3.1
3.3
0.9
-4.2
31-Aug
US$ exchange rate (latest: 05/27)*
VENEZUELA: QUARTERLY INDICATORS
DOMESTIC ECONOMY
GDP
% yoy
GDP, private sector
% yoy
6.2
6.1
3.5
-3.2
31-Aug
GDP, public sector
% yoy
-1.9
-1.1
-3.5
-5.9
31-Aug
Oil sector
% yoy
-1.3
-0.5
-5.0
-7.6
31-Aug
Manufacturing industry
% yoy
5.1
2.7
0.1
-6.3
31-Aug
Financial services and real estate
% yoy
-0.1
1.4
-1.8
-7.3
31-Aug
Commerce
% yoy
4.9
5.3
1.8
-5.7
31-Aug
Bolívares bn
-550
-859
-3423
Budget balance, public sector
14-Jun
EXTERNAL SECTOR
Merchandise exports
US$ bn
7.12
7.02
5.31
5.52
31-Aug
Exports of oil and derivatives
US$ bn
5.82
5.70
4.03
4.36
31-Aug
Merchandise imports
US$ bn
4.44
4.70
4.29
3.57
31-Aug
Trade balance
US$ bn
2.68
2.33
1.02
1.95
31-Aug
31-Aug
Current account balance balance
US$ bn
1.55
0.74
-0.62
0.11
Net foreign direct investment
US$ bn
0.45
1.43
1.43
0.20
31-Aug
Portfolio investment
US$ bn
0.34
0.33
0.30
-0.46
31-Aug
31-Aug
Capital account**
US$ bn
-1.78
-1.84
0.78
-3.81
Change in foreign exchange reserves (Centr. B.)
US$ bn
-1.41
-1.60
0.26
-3.07
US$ bn
0.53
0.51
-0.85
-0.64
Change in foreign exchange reserves (FIEM)***
*month-end
** incl. residual items
***macroeconomic stabilization fund
Dresdner Bank Lateinamerika, Spotlight 6/2002, Venezuela
59
FINANCIAL MARKETS: LATIN AMERICAN STOCK MARKET INDICES
ARGENTINA
BRAZIL
Merval (Peso)
IFCI (US$)
400
1400
20000
IFCI (US$)
600
200
1200
18000
500
000
1000
16000
400
800
800
14000
300
600
600
12000
200
10000
100
400
Bovespa (Reais)
400
200
200
0
0
May-00
Nov-00
May-01
Nov-01
8000
May-02
0
May-00
Nov-00
May-01
Nov-01
May-02
COLOMBIA
CHILE
IPSA (Peso)
IFCI (US$)
IBB/ IGBC (Peso)
120
800
1200
110
700
1100
100
600
90
500
IFCG
800
700
IGBC
1000
IBB
900
600
800
80
400
70
300
May-00
Nov-00
May-01
Nov-01
500
700
600
May-02
400
May-00
Nov-00
May-01
Nov-01
May-02
PERU
MEXICO
IFC (Peso)
IGBVL (Sol)
IFCI (US$)
1000
9000
IFCI (US$)
1800
180
1600
160
1400
140
1200
120
950
900
8000
850
800
7000
750
700
6000
650
5000
600
May-00
Nov-00
May-01
Nov-01
1000
100
May-00
May-02
Nov-00
May-01
Nov-01
May-02
LATIN AMERICA
VENEZUELA
ICB (Bolivar)
IFCI Emerging markets
IFCG
9000
500
IFCI Latin America
800
700
8000
400
600
500
7000
300
400
6000
300
200
5000
200
4000
May-00
60
100
Nov-00
May-01
Nov-01
May-02
100
May-00
Nov-00
May-01
Dresdner Bank Lateinamerika, Spotlight 6/2002
Nov-01
May-02
FINANCIAL MARKETS: LATIN AMERICAN BOND YIELD SPREADS
ARGENTINA
BRAZIL
EMBI+
bps
7000
EMBI+
bps
1300
6000
1100
5000
4000
900
3000
2000
700
1000
0
May-00
500
Nov-00
May-01
Nov-01
May-02
May-00
Nov-00
May-01
Nov-01
May-02
COLOMBIA
CHILE
6 7/8 % US$ bond (2009)
bps
260
EMBI+
bps
1000
900
220
800
180
700
600
140
500
100
400
May-00
Nov-00
May-01
Nov-01
May-00
May-02
Nov-00
May-01
Nov-01
May-02
PERU
MEXICO
EMBI+
bps
1100
EMBI+
bps
500
450
900
400
700
350
300
500
250
300
200
May-00
Nov-00
May-01
Nov-01
May-02
Nov-00
May-01
Nov-01
May-02
LATIN AMERICA
VENEZUELA
EMBI+
bps
1400
bps
1200
1200
JP Morgan Latin America Eurobond Portfolio (LEI)
1000
1000
800
800
600
600
May-00
May-00
Nov-00
May-01
Nov-01
May-02
Dresdner Bank Lateinamerika, Spotlight 6/2002
400
May-00
Nov-00
May-01
Nov-01
May-02
61
DBLA - AN OVERVIEW
Head Office:
Chairman of the Supervisory Board:
Heinrich Linz
Neuer Jungfernstieg 16, 20354 Hamburg
Postfach 30 12 46, 20305 Hamburg
Tel.: (+49 40) 3595-0
Fax: (+49 40) 3595 3314
Telex: 214 236-0 dl d
S.W.I.F.T. DRES DE HL
http://www.dbla.com
Board of Managing Directors:
Holger F. Sommer, Chairman
Horst Herrmann
Richard Voswinckel
Regional Managers:
Argentina:
Horst Tiedemann, Miami
Torre Alem Plaza
Avenida Leandro N. Alem 855, piso 23
1001 Buenos Aires
Casilla 574, 1000 Buenos Aires
Tel.: (+54 11) 4590 7900
Fax: (+54 11) 4590 7910
E-Mail: [email protected]
Central America and Caribbean,
Colombia, Ecuador, Venezuela
Tel.: (+1 305) 810 3118
Fax: (+1 305) 810 3117
Luis Niño de Rivera, Mexico City
Senior Country Manager and
Representative:
Juan G. Gruben
Senior Country Manager:
Marcelo Imhoff
Country Manager and Assistant
Representative:
Rodolfo G. Kempter
Country Managers:
Juan E. Koch
Martín Montoya
Dolores Pérez del Cerro
Mathias Pfaeffli
Christian Wentzel (CCB)
CTF: Eva Göb-Cribb
Mexico
Tel.: (+52 5) 258 3004
Fax: (+52 5) 258 3010
Prof. Dr. Winston Fritsch, Rio de Janeiro
Brazil
Tel.: (+55 21) 3824 3500
Fax: (+55 21) 3824 3501
Pedro R. Nowald, Buenos Aires
Argentina, Paraguay and Uruguay
Tel.: (+54 11) 4590 7900
Fax: (+54 11) 4590 7910
Ewald Doerner, Santiago de Chile
Bolivia, Chile, Peru
Tel.: (+56 2) 731 4444
Fax: (+56 2) 731 3307
Representative Office Buenos Aires
Bolivia:
Representative Office La Paz
o
Calle Rosendo Gutiérrez N 136 esq. Av. Arce
Edificio Multicentro, Torre B, Piso 8
Casilla 1077, La Paz
Tel.: (+591 2) 24 32 14
Fax: (+591 2) 24 32 15
E-Mail: [email protected]
Dresdner Private Banking - The Americas:
Andreas Ehlebracht, Miami
Tel.: (+1 305) 810 3735
Fax: (+1 305) 810 3737 oder 4050
Country Manager and
Representative:
Catrin Pietsch (based in Lima)
Hans-Georg Martens, Hamburg
Tel.: (+49 40) 3595 3531
Fax: (+49 40) 3595 3868
David W. Roda, Miami
Tel.: (+1 305) 810 3739
Fax: (+1 305) 810 4053
Special Finance:
Special Finance Northern Cone, Caracas
Dr. Jerzy Majewski
Tel.: (+58 212) 263 4963
Fax: (+58 212) 263 4086
Special Finance Southern Cone, Buenos Aires
Klaus Kathmann
Brazil:
Dresdner Bank Brasil
Dresdner Bank Lateinamerika AG
São Paulo Branch
Dresdner Bank Brasil S.A. Banco Múltiplo
Management:
Prof. Dr. Winston Fritsch
Martin Duisberg
Rolf-Otto Ladde
Corporate Banking:
Ricardo Cohen
Tel.: (+54 11) 4590 7950
Fax: (+54 11) 4590 7959
62
Dresdner Bank Lateinamerika, Spotlight 6/2002
Brazil:
Dresdner Brasil Representações Ltda.
São Paulo:
(formerly Sudamero Consultoria Ltda.)
Centro Empresarial Transatlântico
Rua Verbo Divino, 1488 - 2° andar
04719-904 São Paulo-SP
Caixa Postal 1665
01064-970 São Paulo-SP
Tel.: (+55 11) 5188 6700
Fax: (+55 11) 5188 6980
E-Mail:
[email protected]
Centro Empresarial Transatlântico
Rua Verbo Divino, 1488 - 1° e 2° andares
Chácara Santo Antônio
04719-904 São Paulo-SP
Caixa Postal 3641, 01060-970 São Paulo-SP
Tel.: (+55 11) 5188 6700
Fax: (+55 11) 5188 6900
Telex:11 53 207 dbla br, 11 53 208 dbla br
S.W.I.F.T. DRES BR SP, DBBM BR SP
E-Mail: [email protected]
Rolf-Rainer Tessmer
Corporate Banking:
María do Carmo C.A. Silva
Rio de Janeiro:
Cayman Islands:
Grand Cayman Branch
Anderson Square Building
P.O. Box 714 GT
Grand Cayman, Cayman Is., B.W.I.
Tel.: (+1 345) 949 8888
Fax: (+1 345) 949 8899
Telex: 4 285 dl cp
S.W.I.F.T. DRES KY KX
E-Mail: [email protected]
Av. Presidente Wilson, 231-17° andar, Centro
20030-021 Rio de Janeiro-RJ
Tel.: (+55 21) 3824 3500
Fax: (+55 21) 3824 3501
E-Mail: [email protected]
Corporate Banking:
Michael Magrath
Management:
Bor Alexander van der Weerden
Carsten Oergel
Senior Trust Manager:
Roy Towne
Belo Horizonte
Rua Paraíba, 1000 - 6° andar
Edifício Asamar
30130-141 Belo Horizonte-MG
Tel.: (+55 31) 3261 7737
Fax: (+55 31) 3261 3667
E-Mail: [email protected]
Corporate Banking:
Lúcio Antônio Vieira
Campinas
Rua Sacramento, 126 - 5° andar, Centro
13010-210 Campinas-SP
Tel.: (+55 19) 3234 3414
Fax: (+55 19) 3234 3745
Telex: 1 93 013 dbla br
E-Mail: [email protected]
Corporate Banking:
Nelson Torres
Curitiba
Edifício Curitiba Trade
Av. Dr. Carlos de Carvalho,
417 - 13° andar, sala 1303, Centro
80410-180 Curitiba-PR
Tel.: (+55 41) 324 4221
Fax: (+55 41) 324 4697
E-Mail: [email protected]
Corporate Banking:
Raul Ribas
Chile:
Dresdner Bank Lateinamerika
Huérfanos 1219
Casilla 10492
Santiago de Chile
Tel.: (+56 2) 731 4444
Fax: (+56 2) 671 3307
Telex: 64 53 47 dres bk cl
S.W.I.F.T: DRES CL RM
E-Mail: [email protected]
Management:
Ewald Doerner
Roland Jacob
Firmenkundengeschäft:
Miguel Ángel Delpín
Alfonso Píriz
Representative Office Santiago de Chile
Huérfanos 1219, Entrepiso
Casilla 9972
Santiago de Chile
Tel.: (+56 2) 688 0411
Fax: (+56 2) 688 0422
E-Mail: [email protected]
Country Manager and Assistant
Representative:
Jan von Dobbeler
Dresdner Lateinamerika S.A.
Corredores de Bolsa
Huérfanos 1219, 5° piso
Santiago de Chile
Tel.: (+56 2) 696 0096
Fax: (+56 2) 699 5083
E-Mail: [email protected]
General Manager: Sergio Anguita G.
Dresdner Bank Lateinamerika, Spotlight 62002
63
Colombia:
Representative Office Bogotá, D.C.
El Salvador:
Representative Office San Salvador
er
Edificio ConstruMarket 3 nivel
Av. Albert Einstein 17C
Lomas de San Francisco
Antiguo Cuscatlán
La Libertad, San Salvador
Tel.: (+503) 273 4738
Fax: (+503) 273 4765
E-Mail: [email protected]
Calle 100 No. 7-33, oficina 1802
Edificio Capital Tower, Torre 1
Bogotá, D.C.
Apartado Aéreo 59303
Bogotá, D.C. 2
Tel.: (+57 1) 655 6990, 524 7868
Fax: (+57 1) 524 7881, 524 7907
E-Mail: [email protected]
Country Manager and
Representative:
Jörg Dittmer
Country Manager
Jesús A. Vaca Murcia
Costa Rica:
Representative Office San José
(Costa Rica and Nicaragua)
Guatemala:
Representative Office Guatemala
(Guatemala, Honduras and Belize)
a
5 Avenida 15-45, Zona 10
Edificio Centro Empresarial
Torre II, 10° piso, Of. 1001-8
01010 Guatemala
Apartado 57-F, 01901 Guatemala
Tel.: (+502) 333 7205-07,
363 2550,363 2553, 363 2560
Fax: (+502)333 7208, 363 2556
E-Mail: [email protected]
Edificio Torre Mercedes, 8° piso
Calle 24, Paseo Colón
Apartado 162, 1007 Centro Colón
San José, Costa Rica
Tel.: (+506) 295 6790
Fax: (+506) 295 6880
E-Mail: [email protected]
Country Manager and
Representative:
Claus Elsner
Country Manager and
Assistant Representative:
Horacio Vivas (CCB)
Ecuador:
Senior Country Manager and
Representative:
Bernd Kleinworth
Country Managers and Assistant
Representatives:
Bertram Heyd
Sören Kruse (CCB)
Country Managers:
Carlos Lemos
David Silvester
Representative Office Quito
Avda. Naciones Unidas y
República de El Salvador
Edificio Citiplaza, piso 11
Casilla 17-01-2179
Quito
Tel.: (+593 2) 2970 747/48/49/50
Fax: (+593 2) 2970 753
E-Mail: [email protected]
Country Manager and
Assistant Representative:
John Viault
Senior Country Manager /
Investment Management:
Wolfgang Leander
México:
Representative Office México, D.F.
Bosque de Alisos 47-A, 4° piso
Col. Bosques de las Lomas
05120 México, D.F.
Tel.: (+52 55) 5258 3170
Fax: (+52 55) 5258 3199
E-Mail: [email protected]
Senior Country Manager and
Representative:
Stephen Lloyd
Country Manager and Assistant
Representative:
Michael Kromm
Country Manager: Rainer Hensel
Dresdner Bank México, S.A.
Bosque de Alisos No. 47-B, 4° piso
Col. Bosques de las Lomas
05120 México, D.F.
Tel.: (+52 5) 258 3000
Fax: (+52 5) 258 3100
S.W.I.F.T. DRES MX MX
E-Mail: [email protected]
Management:
Luis Niño de Rivera
64
Dresdner Bank Lateinamerika, Spotlight 6/2002
Panama:
Panama Branch
U.S.A.:
Representative Office Asunción
14 de Mayo 337
Edificio Asubank, 10° piso
Asunción 1215
Casilla 196
Asunción 1209
Tel.: (+595 21) 49 47 10
Fax: (+595 21) 44 12 68
E-Mail: [email protected]
Country Managers:
Gloria de Grau
Christian Wentzel
(CCB, based in Buenos Aires)
Peru:
Representative Office Lima
Av. Rivera Navarrete 620, Piso 9
San Isidro, Lima 27
Apartado 18-0624
Miraflores 18, Lima
Tel.: (+51 1) 212 5060
Fax: (+51 1) 212 5165
E-Mail: [email protected]
Country Manager and
Representative:
Catrin Pietsch
Country Manager:
Volker Werner
th
Management:
Thomas Spang
Carl Wolf
Corporate Banking:
Sergio Goloubeff
(Commodity Trade Finance)
Robert Barthelmess
(CCB-Central/South America
& Caribbean)
Frank Huthnance
(CCB-North America)
Christian Novy
(CCB-South America & Mexico)
Private Banking:
Nicolás Bergengruen
Thomas Goessele
Investments:
Hans Abate
Management:
Klaus Müller
Henning Hoffmeyer
Corporate Banking:
Zenobia de Fuentes
Personal Banking:
Sören Sammann
Paraguay:
Miami Agency
801 Brickell Avenue, 6 floor
Miami, Florida 33131/USA
P.O. Box 01-6039
Miami, Florida 33101/USA
Tel.: (+1 305) 373 0000
Fax: (+1 305) 374 6912
Telex: 4961 7905 dl us
S.W.I.F.T. DRES US 3M
E-Mail: [email protected]
Torre Dresdner Bank
Calle 50 y Calle 55 Este
Panamá 7, R.P.
Apartado 5400, Panamá 5, R.P.
Tel.: (+507) 206 8100
Fax: (+507) 206 8109
Telex: 3 106 dl pg, 2 244 dl pg,
2 420 dl pg
S.W.I.F.T. DRES PA PA
E-Mail: [email protected]
Venezuela:
Representative Office Caracas
(Venezuela and Trinidad & Tobago)
Centro Gerencial Mohedano, 9° piso,
Of. A y B
Calle Los Chaguaramos,
La Castellana
Apartado 61 379
Caracas 1060-A
Tel.: (+58 212) 261 4097, 261 7425
Fax: (+58 212) 264 6429
E-Mail: [email protected]
Senior Country Manager and
Representative:
Christian Sommerhalder
Country Manager:
Marc Czabanski (CCB)
Glossary of Acronyms:
Uruguay:
Representative Office Montevideo
CCB = Corporate and
Correspondent Banking
CTF = Commodity & Trade Finance
Misiones 1372, Esc. 502
Casilla 1333
11.000 Montevideo
Tel.: (+598 2) 916 0152, 916 0718
Fax: (+598 2) 915 1283
E-Mail: [email protected]
Maria del Rosario Ambrosini
Dresdner Bank Lateinamerika, Spotlight 6/2002
65
PUBLISHED BY:
Dresdner Bank Lateinamerika AG
Neuer Jungfernstieg 16
20354 Hamburg
Germany
Economics/Public Relations Dept.
Chief economist: Dr. Heinz Mewes
Editor: Cyrus de la Rubia, Thorsten Rülle (Miami), Walter Schäfer
Tel.: (+49 40) 3595 3494
Fax: (+49 40) 3595 3497
E-Mail: [email protected]
http://www.dbla.com
Coordination: Kai Stefani
Translation: bromberg & friends GbR, Hamburg
Data sources, among others: Thomson Financial Datastream and
Bloomberg
Layout: Friederike Niemeyer, Hamburg
Closing date: May 28, 2002
“Latin American Spotlight“ is published on a quarterly basis in German and
English.
Without any liability on our part. Reprints - in part or in whole - must mention
source.
The information contained in this issue has been carefully researched and examined by Dresdner
Bank Lateinamerika AG or reliable third parties.But neither Dresdner Bank Lateinamerika AG nor
such third parties can assume any liability for the accuracy,completeness and up-to-datedness of
this information.The authors’ opinions are not necessarily those of Dresdner Bank
Lateinamerika.Statements do not constitute any offer or recommendation of certain investments,even
of individual issuers and securities are mentioned.Information given in this issue is no substitute
for specific investment advice based on the situation of the individual investor. For personalized
investment advice please contact your Dresdner Bank Lateinamerika branch.
66
Dresdner Bank Lateinamerika, Spotlight 6/2002
GLOBAL ECONOMY - FIGURES AND FORECASTS
2000
2001
27/05/02
2002f
2003f
REAL GDP CHANGE *
Industrial countries
% yoy
3.5
1.1
1.7
2.4
USA
% yoy
4.1
1.2
2.7
2.7
Euro area
% yoy
3.4
1.5
1.6
2.6
Germany
% yoy
3.0
0.6
1.3
2.3
Japan
% yoy
1.5
-0.5
-0.7
1.1
USA, 3m money market rate
%
6.5
3.3
1.9
2.3
3.5
USA, 10yr government bond yield
%
6.0
5.0
5.1
5.5
5.6
Euro area, 3m money market rate
%
4.4
4.3
3.5
3.5
3.9
Euro area, 10yr gov. bond yield
%
5.3
4.8
5.2
5.1
5.3
INTEREST RATES, YEARLY AVERAGE*
Japan, 3m money market rate
%
0.3
0.2
0.1
0.1
0.1
Japan, 10yr government bond yield
%
1.8
1.3
1.4
1.5
1.7
EXCHANGE RATES, YEARLY AVERAGE *
US$/ Euro
US$
0.9
0.9
0.9
0.9
1.0
Yen/ US$
YEN
108
122
125
131
129
Yen/ Euro
YEN
100
109
115
120
124
c/lb, NY
85.0
61.9
58.8
60.0
60.0
COMMODITY PRICES, YEARLY AVERAGE
Coffee (other milds)
c/lb, LME
84.0
73.0
73.0
74.0
76.0
Crude oil (WTI)
US$/b
30.3
25.9
26.7
25.6
24.5
Crude oil (Brent)
US$/b
28.9
24.7
24.5
24.8
23.5
US$/ounce
279
271
320
305
295
Copper
Gold
* Source: Dresdner Bank AG
Dresdner Bank Lateinamerika, Spotlight 6/2002
f=forecast
67