ViewsWire Latin America

Pgina 1 de 8

ViewsWire Latin America

June 13th 2008

Contents
5-year forecast table Country forecast summary Country fact sheet Economy: Market opportunities Economic background

previous | next
This article was originally published on March 18th 2008.

5-year forecast table

Latin Americaa
2003b Economic growth (%) GDP Private consumption Government consumption Gross investment Exports of goods & servicesd Imports of goods & servicesd Domestic demand GDP growth per head GDP (PPP weights) Population, income and market size Population (m) GDP (US$ bn at market exchange rates) GDP per head (US$ at market exchange rates) Private consumption (US$ bn) Private consumption per head (US$) GDP (US$ bn at PPP) GDP per head (US$ at PPP) Economic structure (% of GDP) Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services Price inflation (%) Consumer prices (av) Current account (US$ bn) Current-account balance Current-account balance (% of GDP) Trade balance Services balance Income balance Current transfers balance Memorandum items 2.2 1.8 1.3 -3.5 4.1 1.1 0.7 0.7 2.3 2004b 5.9 5.0 2.8 13.0 12.4 14.8 6.1 4.4 6.0 2005b 4.4 5.8 2.9 4.6 7.7 11.5 5.1 2.9 4.6 2006b 5.3 6.0 4.1 12.3 6.9 14.1 7.0 3.9 5.5 2007c 5.1 6.5 3.0 11.9 4.7 12.9 7.1 3.7 5.4 2008c 4.2 4.6 3.4 8.8 4.2 9.0 5.4 2.8 4.5 2009c 4.1 4.1 2.7 7.6 6.4 8.3 4.7 2.7 4.2 2010c 4.0 4.0 2.2 6.6 6.5 7.4 4.4 2.6 0.0 2011c 4.0 4.0 2.2 6.3 6.6 7.2 4.3 2.6 0.0 2012c 4.0 4.0 2.2 6.1 6.7 7.0 4.3 2.6 0.0

514.6 1,793 3,484 1,178 2,289 3,947 7,670

522.0 2,069 3,963 1,323 2,535 4,269 8,178

529.4 2,523 4,765 1,604 3,030 4,611 8,709

536.8 2,938 5,474 1,837 3,421 5,019 9,349

544.2 3,396 6,240 2,137 3,927 5,425 9,969

551.6 3,730 6,762 2,352 4,264 5,785 10,487

559.0 3,849 6,886 2,434 4,355 6,191 11,076

566.3 4,050 7,151 2,566 4,530 6,610 11,671

574.0 4,291 7,475 2,710 4,720 7,047 12,276

581.6 4,560 7,840 2,868 4,931 7,513 12,918

65.7 14.6 17.2 24.4 22.8 10.7 9.7 0.5 44.7 -11.5 -59.0 35.5

64.0 14.2 18.1 25.9 23.8 6.6 22.2 1.1 60.3 -11.8 -68.4 42.1

63.6 14.6 18.3 25.6 23.1 6.3 38.7 1.5 83.5 -16.1 -78.7 50.0

62.5 14.8 19.2 26.0 23.4 5.3 51.3 1.7 100.0 -18.0 -90.5 59.8

62.9 15.0 20.5 25.2 24.4 5.3 23.5 0.7 73.6 -23.8 -88.7 62.5

63.1 15.2 21.6 25.3 25.6 6.3 4.7 0.1 60.0 -28.6 -91.0 64.4

63.2 15.0 22.2 25.9 27.1 5.7 -9.4 -0.2 42.9 -29.6 -89.6 67.0

63.4 15.0 22.6 26.2 28.2 5.3 -32.5 -0.8 18.0 -28.4 -92.4 70.3

63.1 14.8 22.8 27.1 29.3 4.7 -36.7 -0.9 14.1 -27.4 -97.1 73.8

62.9 14.6 23.1 28.0 30.3 4.5 -38.3 -0.8 13.5 -26.3 -103.3 77.8

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 2 de 8

Share of world population (%) Share of world GDP (% at market exchange rates) Share of world GDP (% at PPP) External debt Total external debt (US$ bn) Total external debt (% of GDP) Debt-service ratio, paid (%)
a

8.2 4.9 8.1 811.3 45.2 31.5

8.2 5.0 8.1 808.0 39.1 26.3

8.2 5.7 8.2 720.0 28.5 24.6

8.3 6.1 8.2 718.5 24.5 19.4

8.3 6.4 8.3 774.1 22.8 16.0

8.3 6.4 8.3 789.2 21.2 14.6

8.3 6.4 8.4 795.2 20.7 14.0

8.3 6.0 7.9 807.3 19.9 13.2

8.3 6.0 7.9 821.4 19.1 12.5

8.3 5.9 7.9 838.6 18.4 11.4

Comprises Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad and Tobago, Uruguay and Venezuela. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts. d Includes intra-regional trade.

Download the numbers in Excel Top

previous | next
This article was originally published on March 18th 2008.

5-year forecast table

Mercosura
2003b Economic growth (%) GDP Private consumption Government consumption Gross investment Exports of goods & servicesd Imports of goods & servicesd Domestic demand GDP growth per head GDP (PPP weights) Population, income and market size Population (m) GDP (US$ bn at market exchange rates) GDP per head (US$ at market exchange rates) Private consumption (US$ bn) Private consumption per head (US$) GDP (US$ bn at PPP) GDP per head (US$ at PPP) Economic structure (% of GDP) Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services Price inflation (%) Consumer prices (av) Current account (US$ bn) Current-account balance Current-account balance (% of GDP) Trade balance Services balance Income balance Current transfers balance Memorandum items Share of world population (%) Share of world GDP (% at market exchange rates) Share of world GDP (% at PPP) External debt Total external debt (US$ bn) Total external debt (% of GDP) Debt-service ratio, paid (%)
a

2004b 7.5 5.6 4.6 20.7 13.7 22.9 7.9 6.0 7.3 255 949 3724 563 2209 2228 8740 59.3 16.9 16.8 20.7 14.8 7.1 30.6 3.2 69.5 -8.7 -34.2 4.0 4.0 2.3 4.2 445.2 46.9 36.0

2005b 4.8 6.1 3.3 4.9 8.8 14.6 5.3 3.4 5.1 258 1230 4758 730 2823 2416 9349 59.3 17.6 17.3 20.0 14.3 8.1 45.3 3.7 89.1 -12.7 -35.5 4.4 4.0 2.8 4.3 361.9 29.4 36.9

2006b 5.3 6.5 3.4 15.7 3.2 19.8 7.6 3.9 5.4 262 1495 5707 883 3371 2627 10029 59.1 17.7 18.2 19.2 14.5 6.5 48.3 3.2 91.9 -14.0 -34.9 5.3 4.0 3.1 4.3 363.5 24.3 25.6

2007b 5.9 7.9 4.2 14.7 4.1 21.4 8.6 4.5 6.1 265 1805 6799 1084 4085 2858 10767 60.1 17.7 19.5 18.0 15.8 6.0 30.9 1.7 76.1 -17.4 -32.8 4.9 4.0 3.4 4.4 406.7 22.5 18.2

2008c 4.8 5.6 3.6 9.4 4.2 12.8 6.0 3.4 4.9 269 2042 7590 1231 4578 3062 11383 60.3 17.9 20.7 17.8 16.9 7.5 22.1 1.1 71.8 -20.5 -34.4 5.3 4.1 3.5 4.4 411.3 20.1 17.6

2009c 4.2 4.2 2.9 6.4 7.5 9.6 4.5 2.9 4.2 272 2072 7607 1257 4615 3277 12030 60.7 17.9 21.0 18.4 18.1 7.2 14.3 0.7 64.3 -21.8 -33.9 5.6 4.1 3.4 4.4 410.3 19.8 16.7

2010c 3.9 4.0 2.3 5.2 7.2 7.4 4.0 2.6 4.0 276 2165 7849 1322 4793 3497 12680 61.1 18.0 21.2 18.4 18.9 6.5 3.0 0.1 51.9 -20.3 -34.8 6.2 4.1 3.4 4.4 412.6 19.1 15.6

2011c 3.9 4.0 2.2 5.4 7.1 7.4 4.0 2.6 4.0 279 2281 8165 1391 4977 3728 13341 61.0 17.9 21.3 19.4 19.7 5.3 2.2 0.1 51.4 -19.3 -36.1 6.2 4.1 3.4 4.4 415.4 18.2 14.5

2012c 3.9 3.9 2.2 5.1 7.1 7.0 3.9 2.5 4.0 283 2412 8523 1467 5184 3971 14031 60.8 17.7 21.5 20.3 20.5 5.0 1.4 0.1 51.8 -18.5 -38.2 6.3 4.1 3.4 4.4 419.7 17.4 12.9

2.0 1.1 1.5 -5.4 4.6 0.6 0.0 0.6 2.2 251 782 3112 482 1918 2039 8114 61.6 17.2 15.2 19.2 13.5 15.6 24.2 3.1 58.3 -8.4 -29.4 3.6 4.0 2.1 4.2 455.8 58.3 51.0

Comprises Argentina, Brazil, Paraguay, Uruguay and Venezuela. b Economist Intelligence Unit estimates. c

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 3 de 8

Economist Intelligence Unit forecasts. d Includes intra-regional trade.

Download the numbers in Excel Top

previous | next
This article was originally published on March 18th 2008.

5-year forecast table

Andean communitya
2003b Economic growth (%) GDP Private consumption Government consumption Gross investment Exports of goods & servicesd Imports of goods & servicesd Domestic demand GDP growth per head GDP (PPP weights) Population, income and market size Population (m) GDP (US$ bn at market exchange rates) GDP per head (US$ at market exchange rates) Private consumption (US$ bn) Private consumption per head (US$) GDP (US$ bn at PPP) GDP per head (US$ at PPP) Economic structure (% of GDP) Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services Price inflation (%) Consumer prices (av) Current account (US$ bn) Current-account balance Current-account balance (% of GDP) Trade balance Services balance Income balance Current transfers balance Memorandum items Share of world population (%) Share of world GDP (% at market exchange rates) Share of world GDP (% at PPP) External debt Total external debt (US$ bn) Total external debt (% of GDP) Debt-service ratio, paid (%)
a

2004b 5.4 5.1 0.9 11.7 12.9 14.4 5.7 3.8 5.2 94.5 209 2,214 138 1,463 568 6,011 66.1 14.0 18.2 22.8 22.0 4.9 -1.1 -0.5 5.1 -3.6 -10.3 7.7 1.49 0.51 1.08 92.41 44.2 27.5

2005b 5.4 4.9 6.1 13.9 10.0 15.8 6.8 3.8 5.3 95.9 249 2,595 161 1,675 617 6,434 64.5 13.9 19.4 24.6 23.1 3.8 0.2 0.1 8.2 -4.3 -12.9 9.1 1.49 0.56 1.09 89.65 36.0 30.0

2006b 6.7 6.3 3.3 21.5 5.9 15.5 9.0 5.1 6.7 97.4 282 2,891 172 1,766 680 6,979 61.1 14.9 20.9 27.0 24.7 3.6 2.3 0.8 12.2 -4.7 -16.0 10.8 1.50 0.59 1.11 87.98 31.2 20.9

2007c 6.2 6.6 2.3 19.6 4.1 14.9 9.0 4.7 6.4 98.9 334 3,375 202 2,048 741 7,498 60.7 14.7 23.9 25.6 25.9 4.4 -2.5 -0.8 7.4 -5.4 -16.4 11.9 1.51 0.63 1.13 89.80 26.9 21.8

2008c 5.3 5.3 2.8 14.2 4.7 12.1 7.2 3.7 5.4 100.3 363 3,622 220 2,188 797 7,942 60.4 14.4 26.1 26.4 28.5 4.6 -4.1 -1.1 5.9 -5.9 -17.0 12.8 1.51 0.62 1.15 92.47 25.4 16.2

2009c 4.8 4.7 3.8 9.3 5.7 9.0 5.8 3.3 4.9 101.8 372 3,651 225 2,213 858 8,425 60.6 14.3 27.5 27.4 30.8 3.7 -6.6 -1.8 2.0 -5.8 -16.0 13.1 1.52 0.62 1.16 95.11 25.6 15.1

2010c 4.2 4.4 3.2 6.7 6.6 8.2 4.9 2.7 4.3 103.3 388 3,757 236 2,287 917 8,881 60.9 14.2 28.5 27.9 32.4 3.8 -10.2 -2.6 -2.1 -5.9 -15.6 13.5 1.53 0.61 1.17 98.68 25.4 14.8

2011c 4.0 4.6 3.2 5.3 6.8 7.9 4.6 2.5 4.1 104.8 411 3,920 249 2,380 978 9,330 60.7 14.1 29.0 29.2 33.7 3.8 -10.8 -2.6 -2.8 -5.9 -16.1 14.0 1.53 0.61 1.16 102.83 25.0 14.1

2012c 4.0 4.4 3.1 4.9 6.8 7.2 4.4 2.5 4.0 106.3 438 4,118 264 2,488 1,042 9,801 60.4 14.0 29.3 30.5 34.7 3.8 -10.2 -2.3 -2.2 -5.8 -16.8 14.5 1.54 0.61 1.16 107.68 24.6 13.1

3.8 3.0 0.2 4.4 6.9 2.5 2.8 2.2 3.8 93.1 177 1,907 120 1,295 527 5,667 67.9 14.5 17.5 21.0 21.4 5.6 -2.3 -1.3 1.6 -3.3 -7.4 6.8 1.48 0.49 1.08 89.08 50.2 33.0

Comprises Bolivia, Colombia, Ecuador, Peru and Venezuela. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts. d Includes intra-regional trade.

Download the numbers in Excel Top

previous | next

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 4 de 8

This article was originally published on March 18th 2008.

5-year forecast table

Central Americaa
2003b Economic growth (%) GDP Private consumption Government consumption Gross investment Exports of goods & servicesd Imports of goods & servicesd Domestic demand GDP growth per head GDP (PPP weights) Population, income and market size Population (m) GDP (US$ bn at market exchange rates) GDP per head (US$ at market exchange rates) Private consumption (US$ bn) Private consumption per head (US$) GDP (US$ bn at PPP) GDP per head (US$ at PPP) Economic structure (% of GDP) Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services Price inflation (%) Consumer prices (av) Current account (US$ bn) Current-account balance Current-account balance (% of GDP) Trade balance Services balance Income balance Current transfers balance Memorandum items Share of world population (%) Share of world GDP (% at market exchange rates) Share of world GDP (% at PPP) External debt Total external debt (US$ bn) Total external debt (% of GDP) Debt-service ratio, paid (%)
a

2004b 4.1 3.6 0.3 6.5 11.5 9.0 3.8 1.9 4.4 39 88 2,268 69 1,794 190 4,900 79.1 10.6 17.6 35.9 46.5 6.9 -4.8 -5.4 -12.6 2.5 -2.8 8.2 0.6 0.2 0.4 39.7 45.1 9.7

2005b 4.4 4.5 2.8 3.5 7.6 6.6 4.1 2.3 4.5 40 98 2,470 78 1,972 205 5,179 79.9 10.2 17.6 36.7 47.9 8.3 -4.9 -5.1 -14.7 2.8 -2.7 9.7 0.6 0.2 0.4 38.6 39.6 9.1

2006b 6.1 5.1 4.7 9.2 9.0 8.3 5.9 3.9 6.2 40 109 2,701 87 2,164 224 5,557 80.1 10.2 18.6 37.3 49.1 6.3 -5.2 -4.7 -17.7 3.8 -2.7 11.4 0.6 0.2 0.3 37.2 34.1 10.6

2007b 6.2 5.3 5.3 6.7 7.8 6.8 5.6 4.0 6.3 41 124 3,012 99 2,397 244 5,930 79.6 10.2 19.6 37.2 48.9 7.2 -7.0 -5.7 -21.2 4.1 -2.5 12.6 0.6 0.2 0.4 38.3 30.8 6.3

2008c 4.9 4.2 5.4 9.7 6.2 7.5 5.4 2.7 5.0 42 142 3,375 113 2,682 262 6,227 79.5 10.2 20.5 37.0 49.2 9.0 -8.8 -6.2 -23.9 4.3 -2.7 13.5 0.6 0.2 0.4 39.2 27.6 6.0

2009c 5.3 4.3 5.5 10.1 8.7 9.2 5.6 3.2 5.4 43 159 3,704 126 2,937 284 6,604 79.3 10.2 21.7 37.0 50.1 7.3 -8.9 -5.6 -24.8 4.6 -2.9 14.2 0.6 0.3 0.4 39.7 25.0 5.5

3.7 3.9 0.1 3.1 1.6 1.3 3.4 1.6 3.6 38 81 2,147 64 1,677 177 4,660 78.1 11.1 17.6 34.8 43.9 5.4 -4.1 -5.1 -10.3 2.2 -2.8 6.8 0.6 0.2 0.4 38.7 47.5 10.0

Comprises Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts. d Includes intra-regional trade.

Download the numbers in Excel Top

previous | next
This article was originally published on March 28th 2007.

Country forecast summary

Political outlook In most countries in the region, governments do not control a working majority and legislative fragmentation could undermine political effectiveness and possibly even governability. A maximum of four countries will hold general elections in 2007, including Argentina and Guatemala. Despite victories for candidates sympathetic to the

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 5 de 8

Venezuelan president, Hugo Chvez, in Ecuador and Nicaragua, the majority of left-wing governments espouse broadly pro-market policies, albeit with a stronger emphasis on addressing poverty and improving development indicators. Economic forecast Regional growth is projected to slow to 3.9% in 2007-11, down from 5.1% in 2004-06, but it will stay above the 3.4% average growth recorded in 2002-06. Growth will be driven by domestic demand, which is set to remain above overall GDP growth throughout the forecast period. Most of the gradual GDP deceleration will come from softer export growth combined with faster import growth fuelled by continued, albeit slower, consumer spending. Inflation will continue along the downward trend started in 2004, aided by a forecast gradual decline in oil prices. The region has strengthened its external accounts in recent years but will remain vulnerable to international financing crises and commodity price swings. Business environments are not expected to improve rapidly enough to prevent most countries slipping down the Economist Intelligence Units global rankings. Wide income inequalities will curb the growth of consumer markets

Key indicators
GDP growth (% real change) Consumer prices (av) Current-account balance (US$bn) Current-account balance (% of GDP) External financing requirement (US$ bn) 2006 5.0 5.4 52.7 1.9 -71.0 2007 4.3 5.3 25.9 0.9 -65.9 2008 3.9 5.6 4.9 0.2 -84.0 2009 3.7 5.1 -17.5 -0.5 -106.0 2010 3.8 4.7 -33.2 -1.0 -119.8 2011 3.8 4.4 -42.6 -1.2 -130.3

Download the numbers in Excel Top

previous | next
This article was originally published on March 17th 2008.

Country fact sheet

Latin America Population (m) Population growth (%) GDP (US$ bn; at market exchange rates) GDP growth (%) GDP per head (US$; at market exchange rates) GDP per head (US$; at purchasing power parity) Inflation (av; %) 2006 537 1.4 2,938 5.3 5,474 9,349 5.3 Historical averages (%) Population growth Real GDP growth Real domestic demand growth Inflation Current-account balance/GDP FDI inflows/GDP Debt/exports of G&S 2002-06 1.4 3.5 3.4 7.6 0.8 2.7 132.2

Download the numbers in Excel Background: Military rule and populist economic policies created instability in Latin America for much of the second half of the twentieth century. A debt crisis that started in 1982 threw the region into recession and triggered political changes as military governments fell and economic policies became less nationalist and more market-oriented. The region is now generally much more stable, but a re-emergence of populist and nationalist sentiment, has become a source of concern, particularlybut not exclusivelyamong the more politically unstable natural resource intensive economies, and very high crime rates plague many countries, including the largest, Mexico and Brazil. Political structure: Except for Cuba, all countries have democratically elected governments, most with strong presidencies. Although there is little risk of a return to military rule, confidence in institutions and the political class has fallen during the past decade, reflecting

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 6 de 8

the persistence of widespread un- and underemployment and income inequalities. The loss of support for mainstream parties is leading to more difficult legislative environments and has fuelled instability in several countries (Bolivia, Ecuador, Venezuela). Colombia appears to be gradually emerging from a decades-long guerrilla conflict. Policy issues: Import-substituting industrialisation policies were abandoned in the 1980s-90s, when trade and investment regimes were liberalised across the region. Most countries have floating exchange-rate regimes, usually supported by an inflation-targeting framework. Government finances remain weak in many countries, despite reforms. Latin America has made a large adjustment in its external accounts in recent years, but the combination of a still-heavy burden of external indebtedness and a rising stock of foreign direct investment (FDI), which generates outflows in the form of profit remittances and dividends, means that its external financing requirement will remain high, leaving the region exposed to the international liquidity cycle. The continued predominance of primary commodities among the region's exports has enabled it to benefit from very high world prices in recent years, but constitutes a persistent structural vulnerability. Many, particularly the smallest, countries in the region have also become highly dependent on family remittances from emigrant workers, mostly in the US and Europe. Low skills levels remain a major weakness. Labour-intensive manufacturing export industries (mostly textiles and apparel) are now under threat from rising Asian competition. Taxation: Most regional tax systems rely heavily on indirect taxes and royalties from minerals extraction. Efforts to raise generally low levels of tax collection are often thwarted by a culture of tax evasion and weak institutional capacity. Foreign trade: The region has become more open, with exports rising from 15% of GDP in the first half of the 1990s to over 22% in 2002-06. The US remains the main export market for most countries, although trade diversification has increased. China is a growing market for the region's raw materials' producers. Mexico accounts for around 40% of regional trade.
Leading markets 2006 US EU China Canada % of total 47.5 13.5 4.2 2.2 Leading suppliers 2006 US EU China Japan % of total 34.3 13.8 8.1 5.5

Download the numbers in Excel Top

previous | next
This article was originally published on December 18th 2007.

Economy: Market opportunities

Databank: Market opportunities forecasta
(10=highest)
Argentina Brazil Chile Colombia Ecuador Mexico Peru Venezuela Latin America
a

2007 6.8 7.2 6.0 6.0 4.1 7.6 5.5 5.7 7.1

2008 6.6 7.1 5.9 5.9 3.9 7.6 5.4 5.4 7.0

2009 6.5 7.0 5.9 5.8 3.8 7.6 5.3 5.2 6.9

2010 6.4 6.9 5.9 5.7 3.6 7.7 5.2 5.0 6.9

2011 6.4 6.9 5.9 5.7 3.6 7.7 5.2 5.0 6.9

2012 6.4 6.9 5.9 5.7 3.6 7.7 5.2 5.0 6.9

The EIUs market opportunities rating scores countries between 1 and 10 on market size, growth rates, income

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 7 de 8

levels, trading profile and natural resource endowment, with 1 being low and 10 being high. Source: Economist Intelligence Unit.

Download the numbers in Excel Top

previous | next
This article was originally published on December 19th 2007.

Economic background
Latin America Population (m) Population growth (%) GDP (US$ bn; at market exchange rates) GDP growth (%) GDP per head (US$; at market exchange rates) GDP per head (US$; at purchasing power parity) Inflation (av; %) 2006 537 1.4 2,936 5.3 5,468 9,342 5.3 Historical averages (%) Population growth Real GDP growth Real domestic demand growth Inflation Current-account balance/GDP FDI inflows/GDP Debt/exports of G&S 2002-06 1.4 3.4 3.4 7.6 0.8 2.7 132.2

Download the numbers in Excel Background: Military rule and populist economic policies created instability in Latin America for much of the second half of the twentieth century. A debt crisis that started in 1982 threw the region into recession and triggered political changes as military governments fell and economic policies became less nationalist and more market-oriented. In recent years, a reemergence of populist and nationalist sentiment, fuelled by a failure to lower poverty levels and increasing political alienation, has become a source of concern, particularlybut not exclusivelyamong the more politically unstable natural resource intensive economies. Political structure: Except for Cuba, all countries have democratically elected governments, most with strong presidencies. Although there is little risk of a return to military rule, confidence in institutions and the political class has fallen during the past decade, reflecting economic underperformance and the persistence of widespread income inequalities. The loss of support for mainstream parties is leading to more difficult legislative environments and has fuelled instability in several countries (Bolivia, Ecuador and Venezuela). Colombia appears to be emerging from a decades-long guerrilla conflict. Policy issues: Import-substituting industrialisation policies were abandoned in the 1980s-90s, when trade and investment regimes were liberalised across the region. Most countries have floating exchange-rate regimes, usually supported by an inflation-targeting framework. Government finances remain weak in many countries, despite reforms. Latin America has made a large adjustment in its external accounts in recent years, but the combination of a still-heavy burden of external indebtedness and a rising stock of foreign direct investment (FDI), which generates outflows in the form of profit remittances and dividends, means that its external financing requirement will remain high, leaving the region exposed to the international liquidity cycle. The region remains heavily dependent on primary commodities exports, leaving it vulnerable to fluctuations in terms of trade. Many countries in the region have also become very dependent on family remittances from emigrant workers, mostly in the US and Europe. Low skills levels remain a major weakness. The spread of labour-intensive manufacturing export industries (mostly textiles and apparel) in the 1980s-90s helped to contain unemployment, but these are now under threat from rising Asian competition (especially from China). Taxation: Most regional tax systems rely heavily on indirect taxes and royalties from minerals extraction. Efforts to raise generally low levels of tax collection are often thwarted by a culture

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008

ViewsWire Latin America

Pgina 8 de 8

of tax evasion and weak institutional capacity. Foreign trade: The region has become more open, with exports rising from 15% of GDP in the first half of the 1990s to over 22% in 2002-06. The US remains the main export market for most countries, although trade diversification has increased. China is a growing market for the region's raw materials' producers. Mexico accounts for around 40% of regional trade.
Leading markets 2006 US EU China Canada % of total 47.5 13.5 4.2 2.2 Leading suppliers 2006 US EU China Japan % of total 34.3 13.8 8.1 5.5

Download the numbers in Excel Top

2008 The Economist Intelligence Unit Limited. An Economist Group business. All rights reserved. About us | Contact us | Privacy statement | Terms of access |

Help

http://www.viewswire.com/index.asp?layout=oneclick&pubtype_id=1086275908&co... 13/06/2008