The document discusses economic conditions and forecasts for Latin America. It notes that global recovery is continuing, led by growth in the US, Europe, and parts of Asia. In Latin America, economic activity is also rebounding from recession. However, the region faces challenges in 2010 from appreciating currencies due to a weaker dollar, rising commodity prices, and recovery in domestic activity levels. This could create difficulties for central banks trying to maintain monetary stimulus. The forecasts predict growth will continue in the region over the next few years, but inflation and current account deficits may increase as well.

1. Vientos de Cola Generan Desafíos y Oportunidades
Alberto Ades
Head of Latin America
Economics and Market Analysis
alberto.ades@citi.com
+1 212 816 2735
Noviembre 2009

2. Global
La recuperación global continúa consolidándose. Recientes datos confirman que los EEUU,
Europa, y Canadá están retornando a crecimiento positivo en el tercer trimestre. Esto marcaría
el fin “técnico” de las recesiones en esos países o regiones. Asia está en franca recupreación.
Manufacturing Purchasing Manager Indices ISM New Export Orders and Exports to
Developing Asia (Year-to-Year Percent Change)
65 65
50
50% 65
60 60 40
60
30
55 55
20 55
50 50 10
50
0
45 45
-10 US Expors t Asi ( t
t o a Lef) 45
United States -20 New Expor Or s ( ght
t der Ri )
40 40 40
Euro Area -30
Japan
35 35 -40 35
China
00 01 02 03 04 05 06 07 08 09
30 30
2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

3. Global
Luego de una recuperación inicial impulsada por la recomposición de inventarios, el
crecimiento será desigual por regiones.
Esperamos un mayor rebote en Asia (ex-Japón), y en EEUU un crecimiento más fuerte que
en el resto de los países desarrollados.
Economic Forecast Overview
GDP Growth CPI Inflation CA Balance Fiscal Balance
(%) (%) (% of GDP) (% of GDP)
2009F 2010F 2009F 2010F 2009F 2010F 2009F 2010F
United States -2.5 2.6 -0.4 1.8 -3.2 -4.0 -12.0 -9.0
Japan -5.7 1.0 -1.2 -1.5 2.9 3.4 -11.3 -8.6
Euro Area -3.7 1.6 0.2 1.1 -0.7 0.4 -6.0 -6.5
United Kingdom -4.4 1.3 2.1 3.4 -2.7 -2.1 -12.6 -14.0
Brazil 0.2 5.0 4.9 4.0 -1.1 -2.2 -3.0 -1.8
Russia -7.5 3.0 12.0 8.6 4.0 3.4 -6.5 -4.2
India 5.8 7.8 2.0 5.0 -0.9 0.1 -10.5 -8.5
China 8.7 9.8 -0.6 3.0 6.7 6.2 -3.0 -2.4
Source: Citi Investment Research and Analysis
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4. Global
Los flujos de capitales a países emergentes han aumentado sustancialmente desde marzo.
Esto crea nuevos “problemas” para los banqueros centrales de la región, que deben enfrentar
presiones a la apreciación de sus monedas.
Emerging Market Fund Flows (Weekly By Region)
8 3%
6
2%
W eekl Fl ( S$ bn)
4
2 1%
y ows U
s
% ofasset
- 0%
(
2)
(
4) -1%
(
6) -2%
(
8)
-3%
(
10)
(
12) -4%
J 08 Apr08
an- - J -
ul08 Oc -
t08 De -
c 08 Mar09 J 09 Se 09
- un- p-
G EM S Lat
am EM EA Asi ex
a Tot ( H S)
al R
4

5. Global
Un dólar débil ayudaría a mantener los precios de los commodities elevados, reforzando la
apreciación de los tipos de cambio regionales.
Selected Commodity Prices
475
425
God
l
375 Oil
325 L I x
ME nde
CRB F o I x
o d nde
275
225
175
125
75
25
ul04
ul05
ul06
ul07
ul08
ul09
J 04
J 05
J 06
J 07
J 08
J 09
J-
J-
J-
J-
J-
J-
an-
an-
an-
an-
an-
an-
5

6. Estados Unidos
Las condiciones financieras continúan mejorando y varios indicadores sugieren que la
economía está creciendo nuevamente (el PBI creció 3.5% en 3Q09 y estimamos un 2.0%
de crecimiento para 4Q09).
Monthly GDP (Six-Mos. Smoothed Pct Chg) and Citi
Financial Conditions Index (Standard Deviations)
8%
8 3
3
6 2
1
4
0
2
-1
0
-2
-2
-3
-4
-4
-6 -5
-8 -6
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
RealGDP ( t
Lef) FCI( ght
Ri ) 6

7. Estados Unidos
También hay signos alentadores de recuperación en el mercado inmobiliario y el consumo.
Selected House Price Indexes (Three- Essential and Discretionary Spending
Month Annualized Percent Change) Ex-Autos in PCE (Six-Month Smoothed
Annualized Percent Change)
25
25% 40
25%
15%
15 15
15%
20
30
15 12 12
20
10
9 9
10
5
6 6
0 0
-5
-10 3 3
-10
-20 0 0
-15
-30
-20 -3 -3
-25 -40
99 00 01 02 03 04 05 06 07 08 09 -6 -6
99 00 01 02 03 04 05 06 07 08 09
FHFA Case-Shiller Loan Performance
Essential Discretionary
7

8. Estados Unidos
El empleo temporario ha aumentado significativamente en los últimos tres meses y ha caído
el número de industrias con pérdida neta de empleo.
Three-Month Employment Diffusion and Three-Month Change in
200
200K
Temporary Help Employment (Thousands) 90
150 80
100 70
50 60
0 50
-50 40
-100 30
-150 20
-200 10
-250 0
90 92 94 96 98 00 02 04 06 08
T mpo ar Hep ( e t
e r y l L f) Dif in I x( ght
fuso nde Ri ) 8

9. Estados Unidos
Costos laborales  + Productividad  = Ganancias Corporativas 
Estos factores deberían conducir a crecimiento del empleo (esperamos que la Fed
suba tasas para el verano del norte).
Unit Labor Cost (1992=100), Output Per Hour/Nonfarm Business Sector (1992=100)
and Corporate Profits (SAAR, $bn)
160 1,700
150 1,600
1,500
140
Base 1992=100
SAAR, $ bn
1,400
130
1,300
120
1,200
Unit Labor Cost
110 Output Per Hour - Nonfarm Business Sector 1,100
Corporate Profits (right)
100 1,000
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
9

10. América Latina
La actividad se encuentra repuntando también en la región.
120
Regional GDP Indices (Base Jan 2006 = 100)
115
110
105
100
95
90
85
Jul-06
Oct-06
Jul-07
Oct-07
Jul-08
Oct-08
Jul-09
Jan-06
Jan-07
Jan-08
Jan-09
Apr-06
Apr-07
Apr-08
Apr-09
Latam GDP Weighted USA
Europe Latam Equally Weighted
Evolution of Consolidated Economic Indicators for 2009 – Latin America
Oct-09 Sep-09 Jul-09 Jun-09 May-09 Apr-09 Mar-09 Feb-09
Real GDP Growth (%, yoy) -2.2 -2.2 -3.0 -2.6 -2.5 -0.8 -0.8 0.2
Inflation (% yoy, eop) 5.9 7.9 8.0 8.1 8.7 9.1 8.9 8.6
Inflation IT-5 (% yoy, eop) 3.0 3.0 3.2 3.2 3.1 3.2 3.1 3.3
Current Account (% of GDP) -0.7 -0.7 -1.0 -1.3 -1.5 -1.6 -1.8 -1.8
Fiscal Balance (% of GDP) -2.8 -3.0 -2.7 -2.7 -2.7 -2.6 -2.6 -2.5
Source: Citi Investment Research and Analysis
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11. América Latina
Inflación en baja permite mantener los estímulos monetarios por el momento.
8.
0 %
7.
0
6.
0
5.
0
4.
0
3.
0
2.
0
1.
0
0.
0
Se 04
p- Se 05
p- Se 06
p- Se 07
p- Se 08
p- Se 09
p-
Annualnfato ( weght d)
I l in GDP- i e Annual e I l in ( weght d)
i d nfato GDP- i e
z
11

12. América Latina
Consolidated Macro Forecasts, 2009-2011
2009F 2010F 2011F
ECONOMIC ACTIVITY
Real GDP growth (yoy) -2.2 3.7 3.7
Real Investment Growth (yoy) -12.8 7.4 8.3
Real Consumption Growth (yoy) 0.2 3.9 4.0
Unemployment Rate (%) 8.4 8.5 8.1
PRICES
Consumer Price Inflation (yoy, eop) 5.9 6.7 6.5
Bilateral Real Exchange Rate (% change yoy, + dep.) -19.1 3.3 -2.1
EXTERNAL SECTOR
Current Account Balance (% of GDP) -0.7 -1.2 -1.8
Current Account Balance (in US$ bn) -25.3 -45.9 -75.4
Trade Balance (in US$ bn) 49.1 42.8 49.2
Foreign Direct Investment (in US$ bn) 60.8 71.0 88.2
Terms of Trade (% change yoy, + improvement) -10.1 4.4 3.4
DEBT INDICATORS
Gross External Debt (% of GDP) 21.6 18.3 18.1
Public (% of GDP) 11.4 9.9 9.9
Private (% of GDP) 10.2 8.4 8.2
Source: Citi.
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13. América Latina
En el 2010, las economías latinoamericanas van a enfrentar los siguientes desafíos:
Desafío 1: Presiones a la apreciación de los tipos de cambio reales debido a US
dólar más débil, suba de precios de commodities y recuperación del nivel de
actividad.
Foreign Exchange Forecasts vs. Fair Value and Forwards
2009 2010
Fair Value
Spot Rate Year-end Fair Value Year-end Fair Value
- Today Forward Forward
Forecast Year-end Forecast Year-end
USD/ARS 3.82 3.88 3.90 4.09 3.83 4.55 4.28 4.26
USD/BRL 1.72 1.65 1.65 1.65 1.73 1.80 1.56 1.85
USD/CLP 524 532 540 536 523 550 540 519
USD/COP 1,978 2,190 1,850 2,180 1,984 1,900 2,189 2,063
USD/MXN 13.37 13.29 12.80 13.60 13.43 13.10 14.09 14.08
USD/PEN 2.90 2.97 2.85 2.99 2.90 2.70 2.68 2.90
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14. América Latina
Desafío 2: Inflación en alza.
En algunos países, vemos niveles de inflación cercanos convergiendo hacia las
metas anuales ya para el 2Q o 3Q, posiblemente forzando suba temprana de
tasas (antes que la Fed).
Citi’s Interest Rate Calendar: Who’s Tightening, When?
Current Cumulative
Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Rate (%) Rise
Chile 0.5 0 +50 +75 +100 +75 +300
Peru 1.3 0 0 +75 +75 +75 +225
Brazil 8.8 0 0 +100 +100 0 +200
Colombia 4.0 0 +25 +75 +75 +25 +200
Mexico 4.5 0 0 0 +50 +50 +100
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15. América Latina
Desafío 3: Deterioro en cuentas fiscales y cuenta corriente.
En Brasil, Argentina y Venezuela, gran parte del estímulo consistió en incremento
del gasto corriente (salarios y empleo) que es inflexible a la baja y que va a
demandar suba de impuestos en el mediano plazo.
Deterioro en la cuenta corriente regional por: dólar débil, mayor demanda interna y
desequilibrios fiscales.
3.0 Current Account (% of GDP)
Fiscal Balance (% of GDP)
2.0 1.7 1.8
1.2
1.0
0.7
0.0
-0.6 -0.7
-0.4 -0.5 -0.5 -0.4
-1.0 -0.5
-1.2
-2.0 -2.1
-3.0
-2.8
-4.0 15
2004 2005 2006 2007 2008F 2009F 2010F

16. América Latina
Riesgos a Monitorear en 2010
 Suba temprana (?) de la tasa de Fed funds
Unemployment Rate in Months Surrounding Beginning of Fed Tightening
11%
11 11%
11
10 10
2010F
9 9
8 8
1983
1994
7 7
6 6
2004
5 5
-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 +2 +4 +6 +8 +10 +12
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17. América Latina
 Freno a la expansión económica china
GFCF/GDP of Various Countries Credit and GDP in China (CNY, bn)
45% 50,000
China
40% Japan GDP
40,000
Germany
35% South Korea
Domestic Credit
30,000
30%
20,000
25%
10,000
20%
15% 0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
17

18. América Latina
Cuellos de botella por desinversión en el sector energético durante la
recesión:
Cuellos de botella ponen freno a la recuperación
Venezuela, Ecuador, República Dominicana y Perú en riesgo
 Incertidumbre política en Brasil
 Corriente de El Niño
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