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									                                                                                    ABRIL 2009




                      IMPACTO DE LA CRISIS FINANCIERA GLOBAL SOBRE AMERICA LATINA
C O N FI D EN TI AL




                      Luis Oganes

                      Jefe de Investigación Económica para América Latina
AN D
P R I VAT E
ST R I C T LY
                     Agenda
LAT I N A




                              América Latina no es inmune a la recesión global              1
AM E R I C A




                              Posibilidad de políticas contra-cíclicas es la gran novedad   11
SO B R E




                              Crisis cambiará estrategias de fondos de pensiones            18
G L O B AL




                              Impacto de la crisis sobre Colombia es manejable              22
F I N AN C I E R A
C R I S I S
LA
D E
IMP AC T O




                                                                                                 1
                 Los países desarrollados están en recesión; la recuperación será muy
                 gradual dados los problemas estructurales que deberán superar

                    G-3: Quarterly GDP growth forecasts

                    Real GDP (%q/q, saar)                                3Q08          4Q08       1Q09       2Q09       3Q09        4Q09           1Q10     2Q10
                    Developed markets                                     -0.9          -6.9       -6.8       -2.8        0.1         1.2            1.9      1.7
                     US                                                   -0.5          -6.3       -4.5       -2.0        1.0         1.0            2.0      3.0
G L O B AL




                     Japan                                                -1.4         -12.1      -15.0       -2.5        2.0        4.5             3.5     -0.5
                     Germany                                              -2.2          -8.2      -10.0       -4.0       -2.0         0.0            1.0      1.0
                    Source: J.P. Morgan
R E C ES I Ó N




                    2009 Real GDP growth outlook: global growth outlook being revised down


                                                                                  US       Euro      Japan
                                2.1
                                                                                                              Revised forecasts (as of April 09)
L A




                                                          0.4                    0.6
A




                                          2009 forecast (as of end-August 08)
I N M U N E




                                                                                                      -2.4
                                                                                                                            -3.9
ES




                                                                                                                                                     -6.7
N O




                    Source: J.P. Morgan
L AT I N A
AMÉ R I C A




                                                                                                                                                                    2
                 Luego de resistir la desaceleración global durante los primeros tres
                 trimestres de 2008, América Latina entró en recesión en el cuarto

                    Latin America: real GDP growth forecasts (%q/q, saar except where noted)

                                                                                 2008                    2009          2010   Potential GDP
                                                                          %oya    3Q      4Q      1Q     2Q     %oya   %oya   growth, %oya
G L O B AL




                     Argentina                                            7.0     6.3    -1.2    -10.0   -6.0   -3.0   2.0         4.5

                     Brazil                                               5.1     6.9    -13.6   -4.1    3.8    -1.4   3.0         3.5

                     Chile                                                3.2     -3.0   -8.3    -4.0    0.0    -1.5   3.2         5.3
R E C ES I Ó N




                     Colombia                                             2.5     1.2    -4.1    -1.2    0.5    -0.5   3.0         5.0

                     Ecuador                                              6.5     3.1    -1.0    -4.0    -6.5   -2.0   0.5         3.5

                     Mexico                                               1.3     1.6    -10.3   -12.6   -2.8   -4.0   3.4         3.5

                     Peru                                                 9.8     8.8    0.7     2.4     3.8    3.5    4.7         7.0
L A




                     Venezuela                                            4.8     0.6    3.8     -6.0    -8.0   -2.0   1.5         3.5
A




                     Latin America                                        3.8     3.7    -8.7    -7.6    1.3    -2.4   3.0        3.9
I N M U N E




                     Central America and Caribbean                        4.1      -       -       -      -     -0.6   2.4          -

                    Source: National statistics offices and J.P. Morgan
ES
N O
L AT I N A
AMÉ R I C A




                                                                                                                                              3
                 La contracción de América Latina en 4T08 fue tan profunda como en
                 EEUU; no hubo el “desacople” esperado en la región

                    GDP growth (%oya)

                      8                                                             Latin America    US
G L O B AL




                      6



                      4
R E C ES I Ó N




                      2
L A




                      0
A
I N M U N E




                     -2



                     -4
ES
N O




                     -6
                       1Q94     1Q95      1Q96   1Q97   1Q98   1Q99   1Q00   1Q01    1Q02    1Q03   1Q04   1Q05   1Q06   1Q07   1Q08   1Q09   1Q10
L AT I N A




                    Source: J.P. Morgan
AMÉ R I C A




                                                                                                                                                     4
                 La producción industrial en América Latina se desplomó en el 4T08
                 en línea con el ajuste de inventarios global; aún no toca piso

                    Latin America IP by country (%oya)                                            Latin America IP* (%oya)

                      2008/09    Brazil       Chile      Colombia        Mexico          Peru*
                                                                                                   15

                        Jul        8.8         3.0            0.7           0.1           9.0
G L O B AL




                                                                                                   10
                       Aug         1.9         -3.1          -9.2           -1.8          8.5

                       Sep         9.6         3.6           -3.5           -1.7         12.4        5
R E C ES I Ó N




                        Oct        1.1         -0.8          -7.5           -2.1          4.7
                                                                                                     0
                       Nov         -6.4        -5.7         -13.3           -4.7          1.4
L A




                       Dec        -14.8        -3.7          -9.2           -5.9          3.8       -5
A




                        Jan       -17.4        -8.9         -10.7          -11.1         -2.1
I N M U N E




                                                                                                  -10
                        Feb       -17.0       -11.5         -12.8          -13.2         -7.4

                    *The manufacturing component of GDP serves as a proxy for Peru IP.            -15
                    Source: J.P. Morgan
ES
N O




                                                                                                  -20
                                                                                                    Jan-06      Jul-06     Jan-07     Jul-07     Jan-08      Jul-08     Jan-09
L AT I N A




                                                                                                 *Excludes Argentina, Ecuador and Venezuela; the manufacturing component of GDP served
                                                                                                   as a proxy for Peru IP.
                                                                                                 Source: J.P. Morgan
AMÉ R I C A




                                                                                                                                                                                         5
                 El consumo y la inversión seguirán a la caída de la producción durante
                 2009, pero las exportaciones netas dejarán de restarle al crecimiento
                     Subpar GDP growth in 2009 despite envisioned recovery in        Domestic demand receding with expected stagnation of
                     export volume growth                                            investments; Retrenching imports to wipe out net export drag

                     GDP growth %                                                    %-point contribution to oya real GDP growth
                                                                                16     6
                        6
G L O B AL




                                                                                14    5
                        5
                                                                                      4
                                                                                12
R E C ES I Ó N




                        4
                                                                                      3
                                                                                10
                        3
                                                                                      2
                                                                                8
                        2
L A




                                                                                      1
A




                                                                                6
                        1
                                                                                      0
I N M U N E




                        0                                                       4
                                                                                      -1

                                           GDP Growth                           2
ES




                       -1                                                             -2
                                                                                                                        Consumption
                                           Export volume growth (rhs)
N O




                                                                                                                        Investment
                       -2                                                       0     -3                                Net exports
L AT I N A




                        2000 2001 2002 2003 2004 2005 2006 2007 2008 2009              1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
                    Source: J.P. Morgan
AMÉ R I C A




                                                                                                                                                    6
                 La caída de precios de commodities ha sido severa, pero los precios
                 están estabilizándose en niveles superiores a los vistos en 2005…

                    Latin America: Commodity price indices of select countries (Average 2005 = 100)

                     250                                       Argentina          Brazil              Chile
                                                               Colombia           Peru                Average 2005
                     230
G L O B AL




                     210

                     190
R E C ES I Ó N




                     170

                     150
L A




                     130
A
I N M U N E




                     110

                      90
ES




                      70
N O




                      50
                       Jan-04             Jul-04   Jan-05   Jul-05     Jan-06    Jul-06      Jan-07     Jul-07       Jan-08   Jul-08   Jan-09
L AT I N A




                    Source: J.P. Morgan
AMÉ R I C A




                                                                                                                                                7
                 …lo cual es una buena noticia dada la alta dependencia de América
                 Latina a exportaciones de commodities

                       Latin America: % of each country’s exports
                                                                             Commodities as % of each country exports          Exports to US
                                                    Total             Oil                    Metals              Agriculture    as % of GDP
                        Argentina                    59.9             12.1                     2.7                  45.2            7.8
G L O B AL




                                1
                        Brazil                       53.5             8.3                     17.7                  27.5           15.8
                        Chile                        77.3             0.0                     54.4                  22.9           12.3
                        Colombia                     55.7             24.4                    17.3                  14.0           34.6
                        Ecuador                      77.0             59.8                     0.0                  17.2           43.5
R E C ES I Ó N




                        Mexico                       21.0             16.5                     0.8                  3.7            80.5
                        Peru                         76.9             8.0                     62.0                  6.9            19.0
                        Venezuela                    96.8             93.1                     3.7                  0.0            57.7
                     Source: Official sources and J.P. Morgan
                     1 Brazil imports more oil than it sells abroad
L A
A
I N M U N E
ES
N O
L AT I N A
AMÉ R I C A




                                                                                                                                               8
                 Aún así, el déficit de cuenta corriente crecerá y no podrá ser
                 financiado por los flujos de IED en varios países de la región

                      External accounts (US$ billion)

                                                                                   CA balance                                                              FDI
                                                                                  (US$ billion)                                                        (US$ billion)
                                                                        2008                 2009                  2010                       2008                 2009      2010
G L O B AL




                     Latin America                                      -12.7                -63.5                 -54.6                       99.0                 55.8      80.5
                     Argentina                                            9.1                 -0.2                   1.4                        6.0                  1.0       2.0
                     Brazil                                             -29.2                -19.3                 -15.4                       38.0                 20.0      28.0
                     Chile                                               -6.0                 -4.1                  -0.1                       16.0                  8.0      11.0
                     Colombia                                            -6.8                 -7.8                  -6.9                       10.2                  6.0       7.5
R E C ES I Ó N




                     Ecuador                                              1.2                 -2.4                  -2.0                        1.0                  0.3       0.5
                     Mexico                                             -15.5                -22.1                 -28.5                       18.6                 15.0      24.0
                     Peru                                                -4.7                 -5.4                  -5.9                        7.5                  5.0       6.5
                     Venezuela1                                          39.2                 -2.1                   1.7                        1.7                  0.5       1.0
                     1. Forecast is based on the series reported by the CB of Venezuela which we believe overstates Venezuela's oil exports due to PDVSA data distortions.
                     Source: J.P. Morgan
L A
A
I N M U N E
ES
N O
L AT I N A
AMÉ R I C A




                                                                                                                                                                                     9
                 Dificultad para refinanciar deuda externa del sector privado es otra
                 fuente de vulnerabilidad para la balanza de pagos en varios países


                     Latin America: Private external debt stocks1                                Latin America: Private external debt maturities in 2009 1

                                                 Loans &            Short                % of
G L O B AL




                                                                                                                              Loans &        Short
                    US$ billion                    bonds            term2        Total   GDP    US$ billion                    bonds         term2           Total
                    Latin America                   268.2            133.1       401.3   11.4
                                                                                                Argentina                           4.9       20.6           25.5
                      Argentina                       57.3            20.6        77.9   23.7
R E C ES I Ó N




                      Brazil                          80.0            37.5       117.5    7.4   Brazil                             20.0       37.5           57.5
                      Chile                           41.1            14.2        55.3   32.7
                                                                                                Chile                              12.9       14.2           27.1
                      Colombia                        17.0             4.9        21.9    9.1
                      Ecuador                          5.4             1.5         6.9   13.3   Colombia                            4.1        4.9             9.0
L A




                      Mexico                          55.6            37.6        93.2   10.7
                                                                                                Mexico                             23.2       14.4           37.6
A




                      Peru                             9.0             5.4        14.4    9.9
I N M U N E




                      Venezuela                        2.8            11.4        14.2    4.7   Peru                                0.9        5.4             6.3
                    1. Includes private corporates and banks, latest available                  1. Includes private corporates and banks
                    2. Includes trade financing lines                                           2. Includes trade financing lines
                    Source: J.P. Morgan                                                         Source: J.P. Morgan
ES
N O
L AT I N A
AMÉ R I C A




                                                                                                                                                                     10
                     Agenda
LAT I N A




                              América Latina no es inmune a la recesión global               1
AM E R I C A




                              Posibilidad de políticas contra-cíclicas es la gran novedad   11
SO B R E




                              Crisis cambiará estrategias de fondos de pensiones            18
G L O B AL




                              Impacto de la crisis sobre Colombia es manejable              22
F I N AN C I E R A
C R I S I S
LA
D E
IMP AC T O




                                                                                                 11
                             La novedad esta vez son las condiciones iniciales de América Latina:
                             (1) reservas en nivel récord alto y deuda externa en récord bajo…
N O VED AD




                                 Foreign reserves and external debt to GDP

                                  US$ billion                                 Foreign reserves   External debt/GDP (rhs)                 %GDP
G R AN




                                 450                                                                                                        60


                                 400
L A




                                                                                                                                            50
                                 350
E S
C O N T R A-C Í C L I C AS




                                 300                                                                                                        40


                                 250
                                                                                                                                            30
                                 200


                                 150                                                                                                        20


                                 100
P O L Í T I C AS




                                                                                                                                            10
                                   50


                                    0                                                                                                       0
                                     1981             1984     1987          1990         1993       1996          1999    2002   2005   2008
D E




                                Source: J.P. Morgan
PO S I B I LI D AD




                                                                                                                                                 12
                             …(2) los shocks externos golpearon a América Latina cuando las
                             cuentas fiscales estaban más sólidas que durante crisis previas…
N O VED AD




                                 Overall fiscal balance (% of GDP)

                                     0
G R AN




                                 -0.5
L A




                                    -1
E S




                                 -1.5
C O N T R A-C Í C L I C AS




                                    -2


                                 -2.5

                                    -3


                                 -3.5

                                    -4
P O L Í T I C AS




                                 -4.5

                                    -5
                                     2000             2001    2002   2003   2004   2005   2006   2007   2008   2009   2010
D E




                                Source: J.P. Morgan
PO S I B I LI D AD




                                                                                                                             13
                             … y (3) el sector público en varios países de la región son ahora
                             acreedores externos netos y se benefician de una devaluación
N O VED AD




                                  Brazil, Mexico, Peru and Venezuela: Net External Debt

                                 US$ billion
                                  100                                                Brazil          Mexico          Venezuela       Peru
G R AN




                                    60
L A
E S




                                    20
C O N T R A-C Í C L I C AS




                                   -20



                                   -60



                                 -100
P O L Í T I C AS




                                 -140



                                 -180
                                      1994       1995      1996      1997    1998   1999      2000   2001     2002   2003   2004   2005     2006   2007   2008
D E




                                Source: IBGE, Banxico, BCV and J.P. Morgan
PO S I B I LI D AD




                                                                                                                                                                 14
                             Con la inflación bajo control, los bancos centrales están cortando
                             tasas de interés agresivamente para ayudar al crecimiento
N O VED AD




                                  2009 Emerging Markets policy rate forecasts (%)

                                                                                                                          Inflation target1          Policy stance to              End-2009
                                Region                                Policy Framework                                         (%oya)                   end-2009                 rate forecast
G R AN




                                Brazil                                Inflation target ('99)                                4.5% (± 2%)                   Easing                     9.75
                                Chile                                 Inflation target ('99)                                  3% (±1%)                    Easing                     1.00
                                Colombia                              Inflation target ('99)                                5% (± 0.5%)                   Easing                     5.50
                                Mexico                                Inflation target ('01)                                  3% (± 1%)                   Easing                     4.75
L A




                                Peru                                  Inflation target ('02)                                  2% (± 1%)                   Easing                     4.00
E S




                                1. Government's indicative target in cases of no formal inflation targeting.
                                Source: J.P. Morgan
C O N T R A-C Í C L I C AS




                                 Latin America: CPI inflation – forecasts and targets (%oya, quarterly average, except where noted)

                                                                                                                    2009                                         2010                  Inflation Target
                                                                       2008 (%Dec/Dec) 1Q           2Q          3Q       4Q     %Dec/Dec       1Q     2Q     3Q       4Q    %Dec/Dec          (%)
                                Argentina1                                    7.2       7.0         7.0         6.5      6.0       6.0         9.0   10.0   10.4 10.2         10.0             …
                                Brazil                                        5.9       5.8         5.2         4.4      4.3       4.3         4.8    4.9    4.6      4.5      4.5         4.5 (±2)
                                Chile                                         7.1       6.0         4.0         3.0      2.0       2.0         3.5    3.5    3.4      3.2      3.2         3.0 (±1)
P O L Í T I C AS




                                Colombia                                      7.7       6.4         5.5         5.3      4.8       5.0         4.9    5.0    4.7      4.5      4.5        5.0 (+0.5)
                                Ecuador                                       8.8       7.9         6.0         4.7      5.3       5.5         4.9    3.8    3.7      4.1      4.0          2.4-2.7
                                Mexico                                        6.5       6.2         5.8         5.1      4.0       3.5         3.5    3.3    3.4      3.4      3.4         3.0 (±1)
                                Peru                                          6.7       4.6         4.0         3.2      2.7       2.7         2.6    2.8    2.5      2.0      2.0         2.0 (±1)
                                Venezuela                                    31.9      29.5        29.8        32.4 34.8          35.0        43.3   46.2   42.2 37.4         35.0            19.5
                                Latin America                                 8.1       7.5         7.0         6.5      6.1       5.9         6.9    7.1    6.8      6.5      6.3
D E




                                ex Argentina and Venezuela                    6.4       6.0         5.4         4.7      4.0       3.8         4.1    4.0    3.9      3.8      3.8
                                1. Forecast is for official inflation measure
PO S I B I LI D AD




                                Source: J.P. Morgan




                                                                                                                                                                                                          15
                             Aunque las cuentas fiscales de América Latina son más sólidas, no
                             todos los países pueden aplicar políticas fiscales contra-cíclicas…
N O VED AD




                                  Latin America: 2009 forecasts for fiscal balances (% of GDP)

                                                                                         2008     2009   2010
                                 Latin America                                            -0.1    -2.6   -2.3
G R AN




                                 Argentina                                                 1.3    -1.0   -1.0
                                 Brazil                                                    -1.5   -2.7   -3.0
L A




                                 Chile                                                     8.7    -4.5   -1.0
E S




                                 Colombia                                                  0.1    -2.5   -2.0
C O N T R A-C Í C L I C AS




                                 Ecuador                                                   -0.5   -4.5   -2.0
                                 Mexico                                                    0.0    -2.5   -2.5
                                 Peru                                                      2.4    -1.7    0.2
                                 Venezuela                                                 -2.2   -6.0   -3.0
                                 Source: J.P. Morgan
P O L Í T I C AS
D E
PO S I B I LI D AD




                                                                                                                16
                             … debido a que la mejora en las cuentas fiscales en sí misma se debió
                             a factores cíclicos (vinculada a commodities)
N O VED AD




                                 Latin America: fiscal revenues linked to commodity exports (% of GDP)

                                                                                                   2007     2008
G R AN




                                                                                                     15.2                                  14.5
                                                                                                                                                  13.5
L A
E S
C O N T R A-C Í C L I C AS




                                                                                                                         8.4
                                                                                                                   7.9
                                                                                             7.3


                                                       4.8    4.7
                                              3.5
                                                                                 3.0                                           2.9   2.7
                                      2.5                                 2.6
P O L Í T I C AS




                                      Argentina           Chile            Colombia           Ecuador               Mexico       Peru       Venezuela
D E




                                Source: J.P. Morgan
PO S I B I LI D AD




                                                                                                                                                         17
                     Agenda
LAT I N A




                              América Latina no es inmune a la recesión global               1
AM E R I C A




                              Posibilidad de políticas contra-cíclicas es la gran novedad   11
SO B R E




                              Crisis cambiará estrategias de fondos de pensiones            18
G L O B AL




                              Impacto de la crisis sobre Colombia es manejable              22
F I N AN C I E R A
C R I S I S
LA
D E
IMP AC T O




                                                                                                 18
                      La crisis financiera afectó adversamente al valor de los portafolios
                      de fondos de pensiones, pero la depreciación también ayudó
                         CHILE                                                                                            COLOMBIA
                         95                                 Assets under management (CLP bn)                              63,000
                                                                                                                                                     AUM (COP bn)                                                        ,31
                                                                                                                                                                                                               Feb-09, 61 6
                                                                                                                          61,000
                         85
                                                                                                                          59,000
P E N S I O N E S




                         75                                                                                               57,000

                                                                                                                          55,000
                         65
                                                                                                                          53,000
                                                                                                          Feb-09, 60.1
                         55                                                                                               51,000

                                                                                                                          49,000
D E




                         45
                                                                                                                          47,000
F O N D O S




                                                                                                                          45,000
                         35
                                                                                                                                   Aug-07   Oct-07   Dec-07   Feb-08   Apr-08   Jun-08   Aug-08   Oct-08   Dec-08   Feb-09
                              Jan-07   Apr-07   Jul-07    Oct-07     Jan-08   Apr-08   Jul-08   Oct-08    Jan-09

                        Sources: Superintendencia de Pensiones, J.P. Morgan                                                     Sources: Superintendencia Financiera de Pensiones, J.P. Morgan


                              MEXICO                                                                                      PERU
D E




                          980
                                                                   AUM (MXN bn)                                           70                                           AUM (PEN bn)
E ST R AT E G I A S




                                                                                                           M ar 09, 970
                          960
                                                                                                                          65
                          940

                          920                                                                                             60

                          900
                                                                                                                          55
                          880

                                                                                                                          50
C AM B I AR Á




                          860                                                                                                                                                                                  Feb-09, 49.3

                          840
                                                                                                                          45
                          820

                          800                                                                                             40
                                 Jan-08         A pr-08            Jul-08         Oct-08         Jan-09                         Jan-08      Mar-08        May-08       Jul-08      Sep-08         Nov-08      Jan-09
CR I S I S




                         Sources: Superintendencia de Banca, Seguros y AFP, J.P. Morgan                                        Sources: Consar, J.P. Morgan


                                                                                                                                                                                                                               19
                      Los fondos de pensiones probablemente elevarán su posición neta
                      en moneda extranjera como resultado de la crisis
                         CHILE                                                                                                                 COLOMBIA
                         25%                               FX Exposure                        USD/CLP (rhs)                              700                                        FX exposure                           USD/COP (rhs)
                                                                                                                                               8%                                                                                                                     2,600
                                  20.0%20.0%                                                                                             650
                                                                                                                                                                                                                                 7.0%                                 2,500
                         20% 19.2%
                                                                                                                                                                                                                  6.8%
                                                                                                                                                                                                                                                             6.92%
                                                                                                                                               7%
                                            17.5%                                                                                                                                                                                                                     2,400
                                                                                                                                         600
P E N S I O N E S




                                                                     16.0%                                                                                   6.1%                                                        6.1%            6.0%
                                                             14.9%           14.9%                                                             6%                                                          5.8%                                 5.82%5.83%            2,300
                         15%                                                                                                                         5.5%                                         5.5%
                                                                                                                                         550                        5.3%
                                                     12.5%                       12.3% 1 .9%                                                                                               5.1%
                                                                                        1                                                                                                                                                                             2,200
                                                                                                                                               5%                          4.6%
                                                                                                                                         500                                      4.5%                                                                                2,100
                         10%
                                                                                                7.1%                                           4%                                                                                                                     2,000
                                                                                                                     5.7% 5.5%           450
                                                                                                                                 3.9%
                          5%                                                                                  4.2%                                                                                                                                                    1,900
D E




                                                                                                       3.0%                              400   3%
                                                                                                                                                                                                                                                                      1,800
F O N D O S




                          0%                                                                                                             350   2%                                                                                                                     1,700
                               Mar07      Sep07     Mar08        May08           Jul08         Sep08       Nov08         Jan09                      Dec-07          Feb-08        Apr-08          Jun-08      Aug-08            Oct-08      Dec-08       Feb-09

                        Sources: Superintendencia de Pensiones, J.P. Morgan                                                                         Sources: Superintendencia Financiera de Pensiones, J.P. Morgan


                           MEXICO                                                                                                              PERU
D E




                          15%                                                                                                             16   42%                           Foreign Currency Holdings                     USD/PEN (rhs)                               3.36
                                                          Foreign Currency holdings                    MXN (rhs)                                                                                                                                              41.4%
E ST R AT E G I A S




                                                                                                                                               41%
                          14%            13.73% 13.66%                                                                                                                                                       40.2%
                                                         13.47% 13.40%                                                                    15                                                                                                                           3.26
                                13.24%                                                                                                         40%                                                                       39.7%
                                                                                                                                                                                                                                                    39.3%
                          13%                                                                                                                                                              38.9%
                                                                                                                                          14   39%                                    38.6%                                                 38.5%                      3.16
                                                                          2.21
                                                                         1 %                                                                          38.3%                                      38.4%
                                                                                                                                                                              37.9%                                             37.2%
                          12%                                                                                                                  38%             37.5%
                                                                                                                                          13                                                                                                                           3.06
                                                                                      1
                                                                                     1 .04%                                                    37%
                                                                                              10.82%
                            1
                           1%
                                                                                                       1 8%
                                                                                                        0.1                               12   36%
                                                                                                                                                                      35.0%                                                              35.4%                         2.96
                          10%                                                                                   9.69%
                                                                                                                        9.46%                  35%
C AM B I AR Á




                                                                                                                                 8.99%    11                                                                                                                           2.86
                           9%                                                                                                                  34%

                                                                                                                                               33%
                           8%                                                                                                             10                                                                                                                           2.76
                                                                                                                                               32%
                           7%                                                                                                             9    31%                                                                                                                     2.66
                                Apr-08         Jun-08           Aug-08               Oct-08            Dec-08           Feb-09                       Jan-08          Mar-08         May-08           Jul-08          Sep-08          Nov-08          Jan-09
CR I S I S




                         Sources: Superintendencia de Banca, Seguros y AFP, J.P. Morgan                                                        Current net FX exposure stands at 11.7% of AUM as of March 20th (JPM estimation)
                                                                                                                                               Sources: Consar, J.P. Morgan

                                                                                                                                                                                                                                                                              20
                      Como inversionistas de largo plazo, es probable que los fondos de
                      pensiones sigan agregándole duración a sus portafolios de renta fija
                         CHILE                                                                                                                            COLOMBIA
                         7.50                                               Average years to maturity                                                     7.4                          Fixed Income Duration

                                                                                                           7.07            7.05                                                                                                                                               7.21
                                                                                                                                                          7.2                                                                                               7.17
                         7.00                                                                                                               6.93                                                                                          7.13
                                                                                           6.87
                                                                                                                                                                                                                                7.05                                                  7.05
                                                                                                                                                                                                      7.00                                                           6.99
P E N S I O N E S




                                                                         6.54                                                                             7.0                                6.95                                                  6.97
                                                                                                                                                                                                               6.94
                         6.50                                                                                                                                                                                           6.86
                                                     6.28
                                                                                                                                                          6.8

                         6.00                                                                                                                                     6.62
                                                                                                                                                                                    6.59
                                    5.67                                                                                                                  6.6              6.54

                         5.50
D E




                                                                                                                                                          6.4
F O N D O S




                         5.00                                                                                                                             6.2
                                   Sep-08          Oct-08           Nov-08            Dec-08              Jan-09          Feb-09          Mar-09                Jan-08            Mar-08            May-08            Jul-08           Sep-08             Nov-08            Jan-09
                        Sources: Superintendencia de Pensiones, J.P. Morgan                                                                                     Sources: Superintendencia Financiera de Pensiones, J.P. Morgan


                           MEXICO                                                                                                                         PERU
D E




                          12.5                                            Fixed Income Duration                                                            1
                                                                                                                                                          1 .80              Fixed Income Duration                                          1
                                                                                                                                                                                                                                           1 .68
E ST R AT E G I A S




                                                                                                                                                           1
                                                                                                                                                          1 .60                                                                                                                         1
                                                                                                                                                                                                                                                                                       1 .53
                                                                                                                                                                                                                                   1
                                                                                                                                                                                                                                  1 .47
                                                                                                           12.0
                          12.0                                                                                                                            1 .40
                                                                                                                                                           1                                                                                                           1
                                                                                                                                                                                                                                                                      1 .36

                                                           1
                                                          1 .7                                      1
                                                                                                   1 .7                                                                                                                   19
                                                                                                                                                                                                                         1 .1
                                                                                             1
                                                                                            1 .6                                                                                                                                                                                16
                                                                                                                                                                                                                                                                               1 .1
                                                                                                                                                           1
                                                                                                                                                          1 .20
                                                                  1 .5
                                                                   1                                                1
                                                                                                                   1 .5
                            1
                           1 .5                                            1 .3
                                                                            1                                              1
                                                                                                                          1 .4                                                                                  10.96
                                                                                                                                   1
                                                                                                                                  1 .3                     1
                                                                                                                                                          1 .00
                                                                                                                                                    1
                                                                                                                                                   1 .2            10.85                               10.84
                                                                                    1
                                                                                   1 .1
                                                   1
                                                  1 .0                                                                                                                                                                                                       10.76
                                                                                                                                                          10.80
                                                                                                                                                                                     10.67
                            1
                           1 .0                                                                                                           10.9                                                10.60
                                                                                                                                                                            10.58
                                           10.7                                                                                                           10.60
C AM B I AR Á




                                                                                                                                                                                                                                                    10.49

                                                                                                                                                          10.40
                          10.5
                                   10.2                                                                                                                   10.20

                          10.0                                                                                                                            10.00
                                  Jan-08                 Apr-08                   Jul-08                  Oct-08                 Jan-09                           Jan-08            Mar-08            May-08             Jul-08           Sep-08            Nov-08            Jan-09
CR I S I S




                         Sources: Superintendencia de Banca, Seguros y AFP, J.P. Morgan                                                                     Sources: Consar, J.P. Morgan


                                                                                                                                                                                                                                                                                               21
                     Agenda
LAT I N A




                              América Latina no es inmune a la recesión global               1
AM E R I C A




                              Posibilidad de políticas contra-cíclicas es la gran novedad   11
SO B R E




                              Crisis cambiará estrategias de fondos de pensiones            18
G L O B AL




                              Impacto de la crisis sobre Colombia es manejable              22
F I N AN C I E R A
C R I S I S
LA
D E
IMP AC T O




                                                                                                 22
                 La economía colombiana se contraerá 0.5% en 2009, por lo cual
                 BanRep seguirá cortando tasas agresivamente hasta llegar a 5.5%

                   High frequency indicators continue to show a clear economic         Colombia: industrial production and retail sales contracting
                    slowdown, with IP and retail sales contracting appreciably. The
                    4Q08 GDP contracted at a 4.0%q/q, saar pace, on the back of a                                                     IP (%oya)
                                                                                          20.0                                        retail sales (%oya)
                    29%q/q, saar retreat in fixed investments. Certainly the drop in
                    public works (mainly related to regional governments)                 15.0
MAN E J AB LE




                    accounted for part of this investment retreat and there should        10.0
                    be an improvement going forward. However, even allowing for a          5.0
                    gradual recovery starting in 2Q09, we revised down our full 2009       0.0
                    GDP growth forecast to -0.5%                                          -5.0
                                                                                         -10.0
                   Note that following the fall in 4Q08, there is a 0.4% negative
                                                                                         -15.0
E S




                    carryover for 2009 GDP—meaning that no sequential growth
                    from now on would result in -0.4% growth for the entire year.             Jan-05         Jan-06     Jan-07       Jan-08       Jan-09
C O L O MB I A




                    While partial recovery of regional governments public works
                    should be a positive, we see further downside in private
                    consumption and investments. On this backdrop we expect             Colombia: Consumer lending decelerating in real terms
                    1.2%q/q, saar GDP contraction in 1Q09, meaning that Colombia
                    would already be in a technical recession                            45.0
S O B R E




                                                                                         40.0
                   With limited room for fiscal stimulus and a clear economic           35.0
                    retrenchment, monetary policy should be at the forefront of          30.0
                    Colombia’s stimulus efforts                                          25.0
                                                                                         20.0
C R I S I S




                   BanRep stepped up the easing pace to 100bp in February,              15.0
                                                                                         10.0                  Outstanding credit (COP bn)
                    cutting 300bp since last December, and we expect another                                   Oya (%)
                                                                                          5.0
                    100bp in April followed by a final 50bp cut in May. This would        0.0
LA




                    bring the policy rate down to 5.5% by mid-year—below the 6.0%
                                                                                             Jan-05          Jan-06     Jan-07      Jan-08        Jan-09
                    level reached in the 2005 easing. Our assessment is that
D E




                    BanRep will need to increase rates next year (as conditions        Source: J.P. Morgan
IMP AC T O




                    normalize) but at this point would favor a stimulative policy in
                    order to prevent a shaper economic contraction


                                                                                                                                                            23
                 La reducción de la inflación será gradual, pero BanRep cumplirá
                 su meta de 4.5-5.5% este año

                     Headline inflation continues to recede on the back of           Colombia: Consumer prices (%oya)
                      falling food prices. Food inflation reached only 0.11%m/m,
                      sa in March down from 0.61% in February, taking the oya to      15.0
                      8.7% (from 9.5% in February and 13.2% in 2008)                                              CPI             CPI food
                                                                                      13.0
MAN E J AB LE




                     Lower food inflation allowed headline inflation to fall from
                                                                                      11.0
                      7.7%oya in 2008 to 6.15%oya in March and reinforces
                      BanRep’s confidence that 2009 CPI will fall to its target         9.0
                      (5.0% +/- 0.5%)                                                   7.0

                     Core inflation remains high though, with non-tradables (ex        5.0
                      food and regulated) printing 0.43%m/m in March and
E S




                                                                                        3.0
                      5.36%oya (note that it closed 2008 at 5.25% and 2007 at
                                                                                            Jan-04     Jan-05      Jan-06      Jan-07     Jan-08    Jan-09
C O L O MB I A




                      5.19%). Tradables inflation, while still at low levels, has
                      been drifting higher and reached 2.47%oya, the highest
                                                                                      Colombia: Tradables & non-tradables inflation
                      level since September 2006
                                                                                      (ex food & regulated)
                     Since end-2008 inflation expectations have been drifting
                                                                                     %oya
                      lower, on the back of falling commodity prices and a clear
S O B R E




                                                                                      6.0
                      economic slowdown abroad and locally. The significant                                    Non-tradables            Tradables
                      disinflation of food items lately reinforced this trend, and    5.0
                      in April the median of the 12-months ahead inflation
C R I S I S




                      expectation decreased to 4.50%—the bottom of BanRep’s           4.0
                      target for 2009 CPI. The minutes of BanRep’s March
                      meeting recognized that core inflation remains relatively       3.0
                      high, but the board believes that weaker-than-expected
LA




                      growth and economic slack will reinforce further                2.0
                      disinflation going forward
D E




                                                                                      1.0
IMP AC T O




                                                                                        Jan-04        Jan-05      Jan-06       Jan-07      Jan-08   Jan-09

                                                                                     Source: J.P. Morgan

                                                                                                                                                             24
                 Las brechas fiscal y externa de Colombia se incrementarán en
                 2009, pero ambas estarán financiadas

                    The government recognized lower growth and a wider fiscal
                                                                                          Colombia: Central Government financing need (Uses and Sources)
                     deficit. After the release of the 4Q08 GDP drop last month
                     the government reduced the official 2009 GDP forecast to           COP trillion                      Initial budget Feb revision Apr revision
                     the 0.5%-1.5% range (from 3.0% previously) and increased the       Sources                                   34.3          36.1         37.0
                     forecast of the Central Government deficit to 3.7% of GDP
                                                                                        Disbursements                             29.2          26.4         27.3
MAN E J AB LE




                     (from 3.2%) and the non-financial public sector deficit              External                                 4.7           6.7          8.4
                     forecast to 2.3% of GDP (from 1.8%)                                    o/w bonds                              1.9           2.3          2.3
                                                                                          Domestic                                24.5          19.7         18.9
                    The higher deficit resulted in an additional COP2.5 trillion in
                     financing needs in 2009, which (as announced in late March)        Accrual effects                            0.2           0.6          0.6
                     will be met with increased multilateral financing (US$740          Initial cash holdings                      0.2           3.9          3.9
                                                                                        Central bank proftis                       0.1           0.8          0.8
E S




                     million) and cash resources from the Treasury (COP0.9
                     trillion). Now, total financing from multilaterals is expected     Other (including privatization)            4.6           4.5          4.5
C O L O MB I A




                     to reach US$2.65 billion in 2009 (from US$1.9 billion in the
                     February revision plan)                                             Uses                                     34.3          36.1         37.0
                                                                                         Deficit                                  14.3          17.4         19.9
                    The government successfully issued US$1.0 billion in the
                     external market in an important step to pre-finance 2010
                     needs. Now total pre-financing has reached US$1.7 billion as        Amortization                             19.7          17.1         16.4
S O B R E




                     the government had already announced US$0.7 billion from             external debt                            2.2           2.6          2.6
                     multilaterals to pre-finance 2010                                    domestic debt                           17.5          14.5         13.8

                    The government announced a precautionary one-year lending
C R I S I S




                     arrangement that would allow the country to draw US$10.4            Final cash (2010 prefinancing)            0.2           1.6          0.7
                     billion from the IMF, but the line is considered “insurance”
                     for global crises and there is no intention at this point to tap
LA




                     the credit line. Our assessment is that the government will
                     continue to track external market conditions and will prefer
D E




                     to pre-finance 2010 needs in the market if there is a window
IMP AC T O




                     of opportunity. The FCL certainly increases the room of
                     maneuver
                                                                                        Source: J.P. Morgan

                                                                                                                                                                25
                 El peso colombiano seguirá vulnerable a los precios de commodities,
                 pero podría terminar el año por debajo del pronóstico de 2450-2550

                    Following the sell off registered in 2H08 and early this year,
                                                                                       Colombia: Economic indicators
                     the COP has been performing well since lat March. Better
                     tone in the global market and slightly higher commodity                                                     Average
                     prices are underpinning this benign performance. The sharp                                                  2002-06 2007 2008 2009f 2010f
                     economic slowdown is also prompting significant import           Real GDP, % change                               4.9     7.5    2.5   -0.5    3.0
MAN E J AB LE




                     contraction, limiting the deterioration in the current account   Consumption¹                                     3.6     5.8    1.9    1.8    3.1
                                                                                      Investment¹                                      2.9     3.4    2.0   -1.8    0.8
                     deficit. We still see the current account deficit widening to
                                                                                      Net trade¹                                      -1.7    -1.7   -1.4   -0.4   -0.9
                     about 4.0% of GDP this year                                      Consumer prices, %oya                            5.7     5.5    7.0    4.8    4.7
                                                                                      % Dec/Dec                                        5.7     5.7    7.7    5.0    4.5
                    FDI inflows have been the main source of financing for the
                                                                                      Producer prices, %oya                            5.4     1.0    7.2    5.4    4.0
                     CAD in the past years, having topped US$9 billion in both        Government balance, % of GDP                    -1.5    -1.2    0.1   -2.5   -2.0
E S




                     2007 and 2008, of which more than half went to the oil           Merchandise trade balance (US$ bn)              0.8 -0.6        1.0 -2.5 -1.8
                     sector. Now that commodity prices are falling and global
C O L O MB I A




                                                                                       Exports                                       18.1 30.6       38.5 29.6 33.6
                     growth is clearly slowing, we expect that investments in          Imports                                       17.2 31.2       37.6 32.1 35.4
                     commodity related sectors will decrease, leading to lower FDI    Current account balance                        -1.6 -5.8       -6.8 -7.8 -6.9
                     inflows (we see US$6 billion in 2009). Therefore, there could     % of GDP                                      -1.3 -2.8       -2.8 -4.0 -3.4
                     be a financing gap to the external accounts which may add        International reserves, (US$ bn)               12.7 20.5       22.2 20.2 19.7
                                                                                      Total external debt, (US$ bn)                  38.7 44.6       47.6 50.6 52.2
                     pressure on the currency
S O B R E




                                                                                       Short term²                                    4.6   5.7       6.1   5.6   5.2
                                                                                      Total external debt, % of GDP                  31.9 20.3       19.2 25.3 25.7
                    The Central Bank should continue to use the mechanism to
                                                                                      Total external debt, % of exports³            153.6 102.5      92.6 121.7 114.2
                     control FX volatility, under which the BanRep enters the         Interest payments, % of exports³               10.5   7.7       6.6   8.2   6.7
                     market through Put or Call options (depending on the
C R I S I S




                                                                                      1. Contribution to growth of GDP.
                     currency trend) every time the COP varies by more than 5% of     2. Debt with original maturity of less than one year.
                     its previous 20-day moving average. However, this should not     3. Exports of goods, services, and net transfers.
                     have much influence on the COP, which will follow the
LA




                     general trend in Latin America FX and the tone in commodity
                                                                                      Source: J.P. Morgan
                     markets in particular
D E
IMP AC T O




                                                                                                                                                                          26

								
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