Latin America: From Recovery to Slowdown
José De Gregorio Universidad de Chile
Peterson Institute for International Economics
May 2015
How the world has changed (nominal GDP in USD)
1990 2014
Source: IMF-WEO
China
13% Japan
6%
EU 24%
USA 23%
LATAM 7%
Rest 27%
China 2%
Japan 14%
EU 31%
USA 27%
LATAM 5%
Rest 21%
80 85 90 95 100 105 110
2007 2008 2009 2010 2011 2012 2013 2014e 2015f 2016f Germany
United States Canada
Japan
United Kingdom France
Spain
Are advanced economies fully recovered? GDP per capita (index 2008=100)
Source: FMI,World Economic Outlook, April 2015.
Economic growth 20012-2016(%)
Fuente: FMI,World Economic Outlook, April 2015. LAC7, simple average: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela. Asia7, simple average: China, India, Indonesia, Korea, Malaysia, Phillippines, Thailand
3,4
2,4
0,9
-0,1
7,4
0,1
4,6
5,5
0,6
3,5 3,1
1,5 1,0
6,8
-1,0
4,3
5,5
1,1 3,8
3,1
1,7 1,2
6,3
1,0
4,7
5,5
2,0
-2,0 -1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0
World USA Euro zone Japan China Brazil Emerging Ec. Asia7 LAC7
2012 2013 2014 2015 2016
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f Peru
Colombia
Chile
Brazil
Argentina
Mexico
Venezuela
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f Peru
Colombia
Chile
Brazil
Argentina
Mexico
Venezuela
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Peru
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Colombia
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Chile
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Brazil
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Argentina
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Mexico
Per capita GDP (index 2008=100, based on PPP forecast)
Source: IMF-WEO
80
85 90 95 100 105 110 115 120 125 130 135 140
2007 2008 2009 2010 2011 2012 2013 2014p 2015f 2016f
Venezuela
Growth 2014-2016, Regional Deceleration (%, IMF,
WEO)
-3,9
-2,8
0,1
-1,3
-4,5 -3,6 -2,5 -0,5 1,5 3,5 5,5
Brazil Chile Colombia Mexico Peru
2014 (ap 2013) 2014 (apr 2015) Difference
Growth 2014-2016, Regional Deceleration (%, IMF,
WEO)
-1,0
2,7
3,4 3,0
3,8
-4,5 -2,5 -0,5 1,5 3,5 5,5
Brazil Chile Colombia Mexico Peru
2014 (ap 2013) 2014 (apr 2015) Difference 2015
Growth 2014-2016, Regional Deceleration (%, IMF,
WEO)
1,0
3,3 3,7
3,3
5,0
-4,5 -2,5 -0,5 1,5 3,5 5,5
Brazil Chile Colombia Mexico Peru
2014 (ap 2013) 2014 (apr 2015) Difference 2015 2016
Terms of Trade
Source: Haver, base 2003=100.
80 100 120 140 160 180 200 220 240
2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3
Chile Peru Colombia Argentina Latin America Brazil
Mexico
Growth surprises 2014, Emerging and Developing economies April 2013 vs. April 2015 (%, IMF, World Economic Outlook)
Source: IMF-WEO, considers economies with more than 2 million people and per capita income in 2014 above 2,000 dollars.
-12 -10 -8 -6 -4 -2 0 2 4 6
Dominican Republic Hungary Turkmenistan Islamic Republic of Iran Uzbekistan Namibia Qatar Slovenia Poland India Romania Sudan Malaysia Botswana Vietnam Algeria Sri Lanka FYR Macedonia Philippines Guatemala Moldova Nicaragua Bolivia El Salvador Czech Republic Papua New Guinea Switzerland Republic of Congo Honduras Colombia United Arab Emirates Paraguay Slovak Republic Ecuador Lao P.D.R. Lithuania Albania Oman Saudi Arabia Bulgaria Armenia Uruguay Nigeria Jamaica Turkey China Costa Rica Panama Belarus Egypt Israel Bosnia and Herzegovina Georgia Mexico Kazakhstan Indonesia South Africa Latvia Kuwait Morocco Croatia Lebanon Hong Kong SAR Tunisia Singapore Zambia Chile Argentina Angola Azerbaijan Russia Thailand Mongolia Peru Serbia Brazil Yemen Venezuela Ukraine Iraq Latam
Large EMEs
Investment in Mining Chile and Peru (% of GDP)
Sources: Chile, Central Bank of Chile and Cochilco. Peru, Ministerio de Energía y Minas and Sociedad Nacional de Minería, Petróleo y Energía.
0 1 2 3 4 5 6 7 8 9
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Chile
Peru
Unemployment
Source: Brazil, Colombia and Peru, Bloomberg. Chile and Colombia, OECD, harmonized unemployment rates. Data for Colombia and Peru were adjusted by seasonality. For Chile and Mexico, OECD harmonized data. Data for Colombia and Peru were adjusted by seasonality. Latest available for Chile is December and for Mexico is January. The figures were completed extrapolating official statistics.
2 4 6 8 10 12 14
01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 04/12 07/12 10/12 01/13 04/13 07/13 10/13 01/14 04/14 07/14 10/14 01/15
Colombia Chile Peru Brazil Mexico
Inflation
Source: Bloomberg. Dashed lines correspond to current inflation target. Brazil is 4.5 percent, Chile , Colombia and Mexico 3 percent and Peru 2 percent.
-4 -2 0 2 4 6 8 10
01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 04/12 07/12 10/12 01/13 04/13 07/13 10/13 01/14 04/14 07/14 10/14 01/15
Brazil Chile Mexico Colombia Peru
Monetary policy
Source: Bloomberg 0
2 4 6 8 10 12 14 16
01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 07/10 10/10 01/11 04/11 07/11 10/11 01/12 04/12 07/12 10/12 01/13 04/13 07/13 10/13 01/14 04/14 07/14 10/14 01/15
Brazil Chile Colombia Mexico Peru USA
Exchange rates (domestic currency per USD)
Source: Bloomberg 70
80 90 100 110 120 130 140 150 160 170
01/13 02/13 03/13 04/13 05/13 06/13 07/13 08/13 09/13 10/13 11/13 12/13 01/14 02/14 03/14 04/14 05/14 06/14 07/14 08/14 09/14 10/14 11/14 12/14 01/15 02/15 03/15 04/15
Chile Colombia Peru Brazil Mexico US Broad (Inv)
Current account adjustment? (% of GDP)
Source: IMF-WEO -3,0
-2,0 -1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
Brazil Chile Colombia Mexico Peru
2014 (ap 2013) 2014 (apr2015) Difference 2015 2016
Public debt
-10 0 10 20 30 40 50 60 70
Brazil Chile Colombia Mexico Peru
Gross Debt Net debt
Source: IMF Fiscal Monitor
Export Destination LATAM
Source: Comtrade
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Argentina 2013-14 Argentina 1993-94
Brazil 2012-2014 Brazil 1990-94
Chile 2012-13 Chile 1990-94
Colombia 2012-13 Colombia 1991-94
Mexico 2012-13 Mexico 1990-94
Peru 2012-13 Peru 1990-94
China E. Asia / ASEAN excl. China EU 27 US & Canada LATAM19 Others
Change in interest rates and depreciation after tapering (may 2013-November 2013)
BRA
COL CHI
MEX PER
IND
IDN
PHIMAL
KOR
THA AUS
CAN
ISR
RUS
SAF
TUR
US
-10 -5 0 5 10 15 20
-1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0
Depreciation of the exchange rate (%)
Change in 5Y Govt. Bonds (local currency) Interest Rates (percentage points) Source: Bloomberg
Index of corruption 2013 (index 0 to 100, high is low corruption)
Source: Transparency international. The Index scores 177 countries and territories on a scale from 0 (highly corrupt) to 100 (very clean).
0 10 20 30 40 50 60 70 80 90 100
Haiti Venezuela Paraguay Honduras Nicaragua Russia Dominican Republic Guatemala Africa Argentina Bolivia Mexico Panama Ecuador Colombia El Salvador Peru Medio Oriente China Greece Sudeste Asiático Europa Central y del Este Brazil Italy Cuba Turkey Costa Rica Spain Israel Portugal Puerto Rico Austria France Chile Ireland United States Uruguay Japan Belgium United Kingdom Germany Australia Canada Netherlands Switzerland Norway Finland Sweden Denmark New Zealand
LATAM Non Latam
Crime rate 2012 (number per thousand people)
Source: UNODC. Intentional homicide count per 100,000 population. Data for for 2012 or closest year for the latest data.
0 10 20 30 40 50 60 70 80 90 100
Prom Crime below 3 Chile Vietnam Egypt Sri Lanka India Iran Cuba Ukraine Latvia Niger United States of America Albania Estonia Thailand North Korea Argentina Polinesia Laos Kenya Afghanistan State of Palestine Pakistan Uruguay Iraq Costa Rica Philippines Russian Federation Peru Paraguay Haiti Resto de África Nicaragua Ethiopia Bolivia Ecuador Congo Panama Nigeria Mexico Dominican Republic Caribbean Countries Brazil Puerto Rico DR Congo Colombia South Africa Guatemala El Salvador Venezuela Honduras
Latam Africa Others
Inequality
COL BRA
CRI MEX
URY
PRYBOL ECU
PER
CHL
VEN ARG
PAN
DOM
SLV
HND
GTM
20 25 30 35 40 45 50 55 60 65 70
20 25 30 35 40 45 50 55 60 65 70
2012
1990
Advanced Em Europe
Em Asia Latam-Caribe
CIS Africa-Middle East
Source: World Bank
