El Futuro Económico de América Latina: ¿Hecho en China? Ciudad de Guatemala 28 28--29 de febrero del 2012

Oficina del Economista Jefe América Latina y el Caribe Banco Mundial

1

El entorno global Turbulencia financiera coyuntural

2

Coyuntura global marcada por fragilidad y volatilidad financiera S&P 500 and VIX Index VIX Index

80

VIX Index

1600

S&P500 (rhs)

70

1400

60

1200

50

1000

40

800

30

600

20

400

10

200

Jan-12

Aug-11

Mar-11

Oct-10

May-10

Dec-09

Jul-09

Feb-09

Sep-08

Apr-08

Nov-07

Jun-07

0

Jan-07

0

Sources: Bloomberg.

1800

S&P 500

90

3

El epicentro europeo La reversión de las fortunas Global Sovereign CDS 31-Dec-2007, in basis points

Global Sovereign CDS Feb-2012, in basis points

Argentina Venezuela Ukrain Kazakhastan Tukey Phillipines Indonesia Colombia Panama Peru Vietnam Brazil Russia Romania South Africa Bulgaria Mexico Croatia Thailand Hungary Korea Malaysia Chile Poland Italy Greece Ireland Slovak Rep Portugal Spain Belgium France Germany Sweden

Greece Portugal Venezuela Ukraine Argentina Ireland Hungary avg Croatia Italy Romania Spain Bulgaria Slovak Rep Turkey Kazakhastan Poland Belgium Russia Thailand South Africa Indonesia France Phillipines Peru Korea Brazil Mexico Colombia Malaysia Panama Chile Germany Sweden

0

500

1000

1500

2000

Notes: In panel A, for Ireland we use the first CDS quote available (August 2008). Sources: Bloomberg.

0

1000

2000

3000

4000

5000

6000

7000

4

El epicentro europeo Trauma y drama – ¿cuánto más por venir? CDS (5 years) in Europe In Basis Points

2500

Ireland+Greece+Portugal France UK Spain Italy

2000

1500

1000

500

Notes: In panel A, for Ireland we use the first CDS quote available (August 2008). Sources: Bloomberg.

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Feb-11

Jan-11

Dec-10

Nov-10

Oct-10

Sep-10

Aug-10

0

5

El epicentro europeo 1 moneda, 17 deudas soberanas Spreads Over German Bonds In % 25%

Official Launch of the Euro Portugal

20%

Greece 15%

Ireland France

10% Italy Spain

5% 0%

Source: Bloomberg

Sep-11

Aug-10

Jul-09

Jun-08

May-07

Apr-06

Mar-05

Feb-04

Jan-03

Nov-01

Oct-00

Sep-99

Aug-98

Jul-97

Jun-96

May-95

Apr-94

Mar-93

-5%

6

El epicentro europeo Heterogeneidad estructural y la trampa CDM Unit Labor Costs in Europe Index base 100 = q1-2000

200

Germany 180

Italy Portugal

160

Greece France

140

Spain

Debt Sustainability in Europe Theoretical vs Actual Primary Balance

20.0%

120

Actual

10.0%

% of GDP

80

Q1-2000 Q3-2000 Q1-2001 Q3-2001 Q1-2002 Q3-2002 Q1-2003 Q3-2003 Q1-2004 Q3-2004 Q1-2005 Q3-2005 Q1-2006 Q3-2006 Q1-2007 Q3-2007 Q1-2008 Q3-2008 Q1-2009 Q3-2009 Q1-2010 Q3-2010 Q1-2011

100

15.0%

Theoretical

5.0%

0.0%

-5.0%

-10.0% Greece

France

Ireland

Portugal

Italy

Source: EuroStats and Bloomberg. For panel B, the theoretical primary balances is calculated using the last observation of the nominal interests rates on 10ys bonds, and assuming a long term inflation and growth of 1.5% and 2%, respectively.

Spain

7

El epicentro estadounidence Débil recuperación económica: Keynes vs. Fischer US Economic Activity GDP Index base 100 = Iq - 2003 135 130 2003-2007 trend

Industrial Production and ISM Index Industrial Production (YoY %)

120 70

115 110

10.0%

60

105

5.0%

50 0.0%

ISM Index

100 95

Mar-12

Jun-11

Sep-10

Dec-09

Mar-09

Jun-08

Sep-07

Dec-06

Mar-06

Jun-05

Sep-04

Dec-03

Mar-03

90

40 -5.0% 30 -10.0% 20

ISM Index -15.0%

10

Industrial Production -20.0%

Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

0

Sources: Consensus Forecasts (Feb-2012)and Bloomberg.

8

Industrial Production (YoY)

Index base 100 = Iq - 2003

125

El epicentro estadounidence Menor calificación crediticia pero el lugar de refugio Gold and US T10 2011-2012 2000

4.0%

1900

Foreign Currencies Per Dollar 3.5%

Index base 100 = 1-Jan-2011

1800

115 3.0%

Percent

USD

1700 1600

Yen

UK Pound

Euro

Real

110

2.5%

1500

105

1400 2.0%

Gold

100

1300

Jan-12

Dec-11

1.5%

Dec-11

Oct-11

Sep-11

Aug-11

Jul-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Mar-11

Feb-11

Jan-11

1200

Nov…

US T10

95

Source: Bloomberg

Feb-12

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Jan-11

Dec-10

90

9

El entorno global Multipolaridad económica

10

Desacoplamiento cíclico – centro vs. periferia World Industrial Production Index Apr-08 = 100

120 115

Crisis Advanced Economies Emerging Economies

110 105 100

Contribution to World Economic GDP as a % of World GDP increase (PPP)

95

100%

90 85

8%

11%

8%

8%

7%

8%

80%

Apr-11

Sep-10

Feb-10

Jul-09

Dec-08

May-08

Oct-07

Mar-07

Aug-06

Jan-06

80

34% 60%

44%

57%

40% 51% 20%

38% 27%

0% 1996-2001 Others EM - 20

2001-2006 2009-2011 Other Advanced Economies Euro (15)+US+Japan+Canada+UK

Note: The group of developed countries refers to OECD countries excluding Turkey, Mexico, Republic of Korea, and Central European countries. Source: CPB (Netherlands Bureau for Economic Policy Analysis).

11

Cambios tectónicos en la distribución de la actividad económica global Share of World GDP 100%

Advanced economies

90%

Emerging and developing economies

80%

China

70% 60% 50% 40% 30% 20% 10%

Source: IMF WEO (September 2011)

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

0%

12

Implicaciones para América Latina

13

Crecimiento reciente y pronósticos para el 2012 Real GDP Growth Forecasts Around the World Annual Real GDP Growth Rate, Weighted Averages

9.0% 45,000

12%

25,000 6% 20,000 4%

15,000 10,000

GDP per capita PPP

% Growth Rate

30,000

2012f

7.0%

10% 8%

2011e

8.0%

40,000 35,000

Actual Growth and Growth Forecast: LAC Countries Weighted Averages for LAC

6.0% 5.0% 4.0% 3.0% 2.0%

2010

2011

2012

GDP per capita PPP (2010)

Peru

Panama

Colombia

Dom. Rep.

Chile

Uruguay

Paraguay

Venezuela

Bolivia

Ecuador

Costa Rica

LAC

Argentina

Brazil

0.0%

China

Mexico

India

Nicaragua

Europe & Latin East Asian Central America & Tigers Asia Caribbean

Guatemala

South Africa

Jamaica

High Income

1.0%

0

Trin. & Tob.

0%

5,000

El Salvador

2%

LAC 2012 GDP Growth Forecasts Evolution In % 5.5% LAC (weighted average) 5.0% Guatemala 4.5%

4.0%

3.5%

3.0%

Sources: Consensus Forecast (Feb- 2012), and IMF WEO (September 2011)

Jan-12

Dec-11

Nov-11

Oct-11

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Feb-11

Jan-11

2.5%

14

Desigual desempeño económico en la región La heterogeneidad ha ido mutando en la última década Low-Growth Countries GDP Index 2002=100

Intermediate-Growth Countries GDP Index 2002=100

180

180 Actual

Actual 160

2009

2010

2011

2012

2009

2010

2011

2012

2008

2007

2006

2005

2002

2012

2011

2010

2009

80

2008

80

2007

100

2006

100

2005

120

2004

120

2003

140

2002

140

2003-2007 Trend

2004

2003-2007 Trend

2003

160

High-Growth Countries GDP Index 2002=100

Guatemala

GDP Index 2002=100 180

180 Actual

Actual

2008

2007

2006

2005

2004

2003

2012

2011

2010

80

2009

80

2008

100

2007

100

2006

120

2005

120

2004

140

2003

140

2002

2003-2007 Trend

160

2003-2007 Trend

2002

160

Sources: Potential GPD is computed as the average rate of growth between 2007 and 2003. Simple averages are used to construct the composite. The categorization of each group is as follow: Slow-growth are those countries that showed a less than 3.5% in their 2011-2008 GDP real growth rate; Medium-growth are those between 3.5% and 10%: High-growth are those with 10% or more. WEO (September– 2011).

15

Desigual desempeño económico Importa menos la ubicación que la conexión

Low growth (13) Medium growth (7) Guatemala

High growth (12) LAC (all countries)

(Geometric) Mean growth 2003-2007 Simple Average

(Geometric) Mean growth 2007-2009 Simple Average

(Geometric) Mean growth 2009-2012 Simple Average

Min. 2009-2012

Max. 2009-2012

4.9% 4.5% 4.5% 5.9% 4.8%

-1.6% 1.7% 3.6% 4.5% 1.1%

1.3% 3.4% 3.9% 6.0% 3.5%

-0.1% 2.6% 3.9% 4.5% -0.1%

4.3% 4.4% 3.9% 8.7% 8.7%

Low growth: Antigua and Barbuda, Bahamas, Barbados, Dominica, El Salvador, Grenada, Jamaica, Mexico, St. Kitts and Nevis, St. Vincent and the Grenadines, St. Lucia, Trinidad and Tobago, and Venezuela Intermediate growth: Belize, Costa Rica, Ecuador, Guatemala, Haiti, Honduras, and Nicaragua High growth: Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Guyana, Panama, Paraguay, Peru, Suriname and Uruguay Sources: World Bank’s World Development Indicators – WDI (December 2010), IMF's World Economic Outlook – WEO (April 2011), and Consensus Forecasts (June 2011) – Latest available forecasts. Potential GDP is calculated computing the annual average real growth rate for the 2002-2007 to 2007 GDP. Weighted averages (2007 Nominal GDP in USD Billions).

16

La creciente pero desigual conexión con China…

Output Co-Movement Between LAC and China 20 years rolling correlation of the Real GDP Growth 0.8

Brazil Colombia Peru Panama

0.6

100%

Chile Mexico Argentina Dom. Rep.

Main Trade Partners by Exports 2009

90% 80%

% of Total Exports

0.4 0.2 0.0 -0.2

70% 60% World

50%

UE15

40%

LAC

30%

USA CHN

20%

-0.4 -0.6

0%

-0.8 1980

1984

1988

1992

1996

2000

2004

2008

Belize Bahamas St.Vinc.&… Grenada El Salvador Nicaragua Guatemala Panama Barbados Paraguay Dominica Trin.&Tob. Honduras Suriname Guyana Jamaica Dom. Rep. Mexico Colombia Bolivia Ecuador Argentina Venezuela Uruguay Costa Rica Brazil Peru Chile

10%

17

… está fuertemente mediatizada por commodities 400

Cumulative Change in Terms of Trade Monthly Data, Avg. 2002Q1 vs. Avg. 2011Q1

Commodity Prices Oil WTI in Current US$, Wheat, Copper and Soybean: Index base Jan-05=100

Peru

150

Chile Ecuador

130 110 250 90

200

70

150

Argentina

Oil WTI, Current US$

300

LAC Colombia Uruguay Mexico Guatemala Brazil

100

50

Jamaica

50

30

Costa Rica

Jan-12

Jan-11

Jan-10

Honduras -20%

10%

40%

70%

100%

130%

Terms of Trade Px/Pm Index 2005 = 100

1.4

LAC 6 Average

1.3

Guatemala 1.2

1.1

1

0.9

0.8

Feb-12

Jun-10

Apr-11

Oct-08

Aug-09

Feb-07

Dec-07

Jun-05

Apr-06

Oct-03

Aug-04

Feb-02

Dec-02

Jun-00

Apr-01

Aug-99

Oct-98

Feb-97

Dec-97

Jun-95

Apr-96

Aug-94

Oct-93

Feb-92

0.7

Dec-92

Jan-09

Jan-08

Jan-07

Jan-06

Panama

Jan-05

Wheat, Copper and Soybean, Index 01-Jan-05=100

350

18

En el corto plazo el foco está en la vulnerabilidad El sistema inmunológico macro de LAC ha mejorado Exchange Rate and Interest Rate in Guatemala

Exchange Rate and Interest Rate in Guatemala 9 8.5

50%

8.6

45%

8.4

40%

8.2

35%

8

8%

7%

8 7.5

30%

6% 7.8

25%

7

7.6 5%

20%

6.5

Series1

Series2

7.4 15% 10%

5.5

5% 0%

7

4%

Interest Rate

6.8

Jan-97 Jun-97 Nov-97 Apr-98 Sep-98 Feb-99 Jul-99 Dec-99 May-00 Oct-00 Mar-01 Aug-01 Jan-02 Jun-02 Nov-02 Apr-03 Sep-03 Feb-04 Jul-04 Dec-04 May-05 Oct-05 Mar-06 Aug-06

5

Nominal Exchange Rate

7.2

3%

Jan-06 06 Apr-06 06 Jul-06 06 Oct-06 06 Jan-07 07 Apr-07 07 Jul-07 07 Oct-07 07 Jan-08 08 Apr-08 08 Jul-08 08 Oct-08 08 Jan-09 09 Apr-09 09 Jul-09 09 Oct-09 09 Jan-10 10 Apr-10 10 Jul-10 10 Oct-10 10 Jan-11 11 Apr-11 11 Jul-11 11 Oct-11 11 Jan-12 12

6

Exchange Rate Flexibility Reinhart and Kenneth S. Rogoff Index

Interest Rates in LAC Monetary Policy Rates Inflation-Targeting LAC Countries

14 0.20

Fed Funds Target Brazil

0.18

12

Chile

0.16

Colombia

10 0.14

Peru Mexico

0.12

8

Guatemala

1998 6

0.10

2010 0.08 0.06

4

0.04

2 0.02

Notes: The Exchange Rate Flexibility Index is between 1 (totally rigid exchange rate regime) and 13 (freely floating exchange regime.

Jan-12

Jul-11

Oct-11

Jan-11

Apr-11

Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

Apr-09

Jul-08

Oct-08

Jan-08

Apr-08

Jul-07

Oct-07

Guatemala

Jan-07

Peru

Apr-07

Mexico

Jul-06

Chile

Oct-06

Brazil

Jan-06

Colombia

Apr-06

0.00

0

19

El foco de largo plazo es crecimiento con equidad ¿Cómo salir de los 100 años de soledad en el crecimiento?

GDP Per Capita of Relative to the US Selected Regions, Weighted Averages 90%

Interwar Period

Gold Standard Period

Import Substitution

Lost Decade

Washington Washington Consensus Dissensus

Average TFP growth per year

80%

Avg 61-70 Avg 71-80 Avg 81-90 Avg 91-00 Avg 01-08 Avg 61-08

70% 60% 50% 40% 30% 20% 10%

1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

0%

LAC

EAP: High Income

LAC 7 Non - LAC 7 Costa Rica Dominican Republic El Salvador Guatemala Honduras Nicaragua Trinidad &Tobago EAP China United States Japan

1.9% 1.1% 2.2% 0.1% 0.9% 2.1% 0.3% 2.2% 3.0% 3.1% -0.5% 0.9% 6.7%

0.4% 0.5% -1.3% 0.2% -1.6% 1.2% 1.0% -1.4% -1.3% 2.1% 0.9% -0.4% 1.1%

-2.0% -2.0% -2.6% -0.8% -1.9% -1.7% -1.3% -3.8% -3.0% 2.3% 1.6% 1.1% 1.4%

0.2% 0.1% 0.2% 2.3% 0.5% 0.4% -2.7% -1.4% 3.3% 1.3% 3.4% 1.0% -0.7%

1.0% 1.2% 0.2% 1.7% 0.0% -0.6% 1.2% -1.3% 8.1% 2.0% 6.2% 0.6% 0.9%

0.3% 0.2% -0.3% 0.7% -0.4% 0.3% -0.3% -1.1% 2.0% 2.2% 2.3% 0.6% 1.9%

Guatemala

20

Guatemala está entre los países de “resago estable” Diverging

Non-Converging

80%

80%

70%

70%

60%

60%

50%

50% 40%

40%

30%

30%

20%

20%

10%

10%

Argentina

Colombia

Uruguay

Guatemala

El Salvador

Bolivia

2010

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

1950

2010

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

1955

1950

Venezuela

1955

0%

0%

Paraguay

Fluctuating

Semi-Converging

50%

50%

45%

45%

Chile

Dominican Republic

Mexico

2010

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

0%

1955

0%

2010

5%

2005

10%

5%

2000

10%

1995

15%

1990

15%

1985

20%

1980

20%

1975

25%

1970

25%

1965

30%

1960

30%

1955

35%

1950

35%

1950

40%

40%

Brazil

Notes: Maddison (2007-2009) was used from 1900 to 2006 and Real Per Capita GDP growth from WDI was used to calculate the levels from 2006 to 2010. Source: LCRCE Staff calculations based on Maddison (2007, 2009) and WDI.

21

Las cortapisas al crecimiento de largo plazo Ahorro e inversión bajas

Investment Decade Average

Gross Domestic Savings Decade Average 40%

35% LAC-7 30%

35% EAP

30%

Guatemala 25%

LAC-7 EAP Guatemala

% of GDP

% of GDP

25% 20% 15%

20% 15%

10%

10%

5%

5%

0%

0% 1960's

1970's

1980's

1990's

2000's

1960's

1970's

1980's

1990's

Notes: In Panel A, EAP includes Hong Kong, Indonesia, Korea Rep., Malaysia, Singapore, and Thailand. In Panel B, EAP includes Hong Kong, Indonesia, Korea Rep., Malaysia, Singapore, Taiwan, and Thailand. Both in Panel A and B, LAC-7 includes Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela. Sources: WDI, Penn World Tables, and The International Energy Agency (IEA).

2000's

22

En Guatemala Insuficientes recursos para bienes públicos

60.0 50.0 40.0

Tax revenues by type of taxes % GDP

Direct tax revenues

Indirect tax revenues Social contributions Other taxes

30.0 20.0 10.0

1990 2000 2010 1990 2000 2010 1990 2000 2010 1990 2000 2010 1990 2000 2010 1990 2000 2010 1990 2000 2010 1990 2000 2010 1990 2000 2010

0.0

Guatemala Venezuela Honduras

Chile

USA

Argentina

Brasil

OECD

Suecia

23

Las cortapisas al crecimiento de largo plazo Brechas de infraestructura

Electricity Installed Capacity In thousands of KW per 1000 people, simple averages 1.4 1.2

EAP

Road Density In thousands of KM per 1000 people, simple average 0.0090 0.0080

LAC7 + URY Guatemala

1.0

LAC7 + URY Guatemala (available data)

0.0070 0.0060

0.8

0.0050

0.6

0.0040 0.0030

0.4

0.0020 0.2 0.0010 0.0000

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0.0

24

Las cortapisas al crecimiento de largo plazo Brechas institucionales Rule of Law

Control of Corruption 2.5

3 2.5

2

2

1.5

1.5

1

1

0.5

0.5

0

0

-0.5

-0.5

-1

Guatemala

-1.5

Guatemala

-1

-2

-1.5

-2.5

-2 4

5

6

7

8

9

10

11

4

12

5

6

7

8

9

10

11

12

10

11

12

Log of GDP per capita PPP in 2010

Log of GDP per capita PPP in 2010

Regulatory Quality

Government Effectiveness

2.5

2.5

2

2

1.5

1.5

1

1

0.5

0.5

0

0 Guatemala

-0.5

-0.5

-1

-1

-1.5

-1.5

-2

-2

-2.5

Guatemala

-2.5 4

5

6

7

8

9

Log of GDP per capita PPP in 2010

Source: D. Kaufmann, A. Kraay, and M. Mastruzzi 2003: G

10

11

12

4

5

6

7

8

9

Log of GDP per capita PPP in 2010

25

Las cortapisas al crecimiento de largo plazo Brechas en capital humano LAC-7 2010

14.2

Guatemala 1990

East Asian Tigers 2010

9.9

2.8

9.7

7.9 20.3

No School Primary

46.7

29.3

Secondary Tertiary

40.3 40.6

37.5 40.7 LAC-7 1990

9.5

East Asian Tigers 1990 9.9

10

16.4

Guatemala 1990 2.8

19.3

23.1

No School Primary

46.7

29.7

Secondary Tertiary

51

Source: Author’s calculation based on Household datasets and Barro-Lee (2010)

40.9

40.6

26

Gracias

27

Tipo de cambio efectivo: nominal y real

Real Effective Exchange Rates Index Jan-06=100

160 150 140

Nominal Effective Exchange Rates Index Jan-2006 = 100

160 Brazil

Brazil

Chile

150

Colombia

Mexico

140

Peru

Guatemala

130

Chile Colombia Mexico Peru

130

Guatemala

120

120

110

110

Source: World Bank and IFS.

Jul-11

Oct-11

Jan-11

Apr-11

Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

Apr-09

Jul-08

Oct-08

Jan-08

Apr-08

Jul-07

Oct-07

Jan-07

Apr-07

Jul-06

Oct-06

Jan-06

Jul-11

Oct-11

Jan-11

Apr-11

Jul-10

Oct-10

Jan-10

Apr-10

Jul-09

Oct-09

Jan-09

Apr-09

Jul-08

Oct-08

Jan-08

Apr-08

Jul-07

60

Oct-07

60

Jan-07

70

Apr-07

70

Jul-06

80

Oct-06

80

Jan-06

90

Apr-06

90

Apr-06

100

100

28