Latinoamerica en cifras

UBS Investment Research

Latin American Economic Focus

LatAm by the Numbers

(4th Quarter 2010) What the numbers say: Growth continues to be robust across countries and

sectors. Peru, Argentina, Brazil and Chile are leading the way. Mexico, Colombia and especially Venezuela are lagging. Despite domestic demand-led recoveries, inflation remains reasonably stable. Inflation targeting countries show rates wellwithin their target bands (Mexico is an exception on account of one-off factors). Credit is recovering, but growth rates remain at about half of the levels observedbefore the crisis. The external accounts remain solid, with high and growing capitalaccount surpluses (>3% of GDP) financing both a small current account deficit(<1% of GDP) and large foreign reserve accumulation. Import growth hasstabilized at 35% y/y, 6 ppts above export growth. The region is showing animprovement in its fiscal position to -2% of GDP in 2010 from -3.2% in 2009, but this is mostly due to rapidly rising revenue growth. Prior to the crisis, the region’sfiscal balance used to be between 0 and -1% of GDP. Labor markets are improvingfor the most part, with countries enjoying declining unemployment rates and risingreal wages. Debt to GDP ratios have either stabilized or resumed their downwardtrend. Other key vulnerability indicators are also heading in the right direction.Venezuela is the sole exception.

What the numbers mean: A number of countries are in the midst of a virtuouscycle in which growth in wages, employment and credit fuels domestic aggregatedemand feeding back into the labor markets. However, there are already a few economies that appear to be at or near overheating territory (Brazil, Chile, Peru andArgentina). Perhaps due to countries’ own political cycles, fiscal retrenchment hasbeen a disappointment. This is particularly true in the face of impressive recoveriesand the large stimulus put in place during the crisis. Higher commodity prices havehelped countries to grow at a fast pace without developing material current accountdeficits. Improvements in debt ratios are largely the result of the denominatoreffect (high growth and real exchange rate appreciation).

12-month outlook: We see regional growth in 2011 slowing to 4.6% from6.3% in 2010 with countries facing growing bottlenecks, net export contribution togrowth becoming even more negative and higher base effects taking place. Weexpect the inflation targeting Central Banks to resume their hiking cyclesthroughout 2011, with all of them meeting their 2011 targets. High growthdifferentials against much of the world and continued currency strength shouldcontribute to deteriorate the region’s current accounts deficit to 1.7% of GDP in2011 from 0.8% of GDP in 2010. On the fiscal front, we see improvements in Brazil, Chile, Peru and Colombia, stability in Mexico and deterioration inArgentina and Venezuela. We also expect FX stability pretty much across theboard, though we continue to characterize the FX policy regimes in Argentina and Venezuela as unsustainable. Labor markets should continue to recover. Ourstrategists are not believers in the EM equity bubble story. They see underlyingvalue primarily in Brazil. On the fixed income side, we favor local markets overhard currency bonds.

Global Economics Research

Latin America

New York

15 November 2010

www.ubs.com/economics

Javier Kulesz

[email protected]

+1-203-719 1603

Andre CarvalhoEconomist

[email protected]+55-11-3443 6345

Rafael De La FuenteEconomist

[email protected]+1 203 719 7127

This report has been prepared by UBS Securities LLC ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 38.

ab

mailto:[email protected]



Latin American Economic Focus 15 November 2010

UBS 2

GDP growth

What the numbers say: LatAm has recovered impressively from the crisis. In Q2, the region grew by 6.1% y/y and 2.2% q/q. With the exception of Venezuela, all the countries are printing high growth rates. As a rule of thumb, the further south you go in the region, the faster the GDP growth is. High frequency data of economic activity continues to point to strong economies in Q3, especially in Peru.

What the numbers mean: As of Q2, the level of regional economic activity had already surpassed the pre-crisis high by 3.2%. The recovery has been so dramatic that Argentina, Brazil, Chile and Peru have also started to show some signs of overheating. Though performance in Colombia and Mexico is decent, they appear to have at least a couple of quarters to go before overheating becomes a major concern.

12-month outlook: We expect overheating countries to slow towards rates more consistent with their +/-5% medium term averages (somewhat higher for Peru and Chile and somewhat lower for the rest). Growing bottlenecks, more negative net export growth contribution and higher base effects will constrain their performance. We see regional growth in 2011 at 4.6%, down from 6.3% in 2010.

Chart 1: Overall GDP growth Chart 2: Real GDP growth by country (% y/y)

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130y /y % grow th Index Q1-04=100 (RHS)

+3.2% from pre-crisis high

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ARG BRA CHI COL MEX PER VEN

Source: UBS and Haver. Source: UBS and Haver.

Chart 3: Real GDP (sa, Q1-07=100) Chart 4: GDP per capita (USD)

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ARG BRA CHI COLMEX PER VEN



UBS 3

GDP growth by component What the numbers say: Domestic aggregate demand is by far the main driver for growth. Current growth decomposition is in sharp contrast with performance observed during the crisis, where domestic aggregate demand contributed negatively and net exports positively. As in the previous GDP growth section, we can also apply the rule of thumb that the further south you go, the faster domestic aggregate demand growth is.

What the numbers mean: Many countries are in the midst of a virtuous cycle in which higher credit growth, improving conditions in the labor market and accommodative fiscal policies are feeding into something close to an explosion in consumption and investment. However, Mexico but especially Venezuela, face different dynamics.

12-month outlook: There is a bifurcated view here. In the overheating countries (Chile, Peru, Argentina and Brazil), domestic aggregate demand growth is due for a slowdown. It can’t simply sustain double digit growth rates forever. However, in Mexico and to a lesser extent Colombia, we would expect continued strength in some ways playing catch up with their southern neighbours.

Chart 5: LatAm real GDP growth by components (% y/y) Chart 6: Brazil real GDP growth by components (% y/y)

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-3-2-101234567Total consumption Inv estment Net ex ports GDP (RHS)

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Total consumption Inv estment Net ex ports GDP


Chart 7: Argentina real GDP growth by components (% y/y) Chart 8: Mexico real GDP growth by components (% y/y)

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Total consumption Inv estmentNet ex ports GDP



UBS 4

GDP growth by component, continued

Chart 9: Chile real GDP growth by components (% y/y) Chart 10: Colombia real GDP growth by components (% y/y)

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Chart 11: Venezuela real GDP growth by components (% y/y) Chart 12: Peru real GDP growth by components (% y/y)

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-8-6-4-2024681012Total consumption Inv estment Net ex ports GDP (RHS)

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UBS 5

Consumption What the numbers say: Consumption in Q2 grew by 5.2% y/y and 1.7% q/q. It’s been the most dynamic

component of aggregate demand since the crisis began. Both private and public consumption are important drivers. Recent retail sales numbers continue to point to strength into Q3. This is particularly true in Chile, Argentina and Colombia. Brazil is actually showing some stabilization.

What the numbers mean: In a number of counties, there is a consumption boom going on, especially in durables. The re-emergence of credit, the recovery of employment, wages and accommodative fiscal stance are fuelling these dynamics.

12-month outlook: Consumption will continue to be a key driver in the quarters to come, but a slowdown in the fastest growing economies is bound to happen. Spending growth in autos and other key durables would slow markedly from the current torrid pace. Public spending growth should also ease, especially in the many countries that have put their recent elections behind. At the other end is lagging Mexico, which could play catch-up in the face of signs of recovery in its labor market. However, without credit support, it is unlikely to soar.

Chart 13: LatAm total real consumption Chart 14: Real consumption (Q1-07=100)

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132y /y % grow th Index Q1-04=100 (RHS)

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/07

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ARG BRA CHI COL MEX PER

Source: UBS and Haver. Source: UBS and Haver..

Chart 15: Total consumption by components (% of GDP) Chart 16: Real retail sales (% y/y, 3m ma)

0102030405060708090

100


Priv ate consumption Public consumption

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ARG BRA CHI COL MEX VEN



UBS 6

Investment What the numbers say: Investment was the fastest driver for growth in Q2 (up +22.2% y/y and 4.9% q/q sa, not a

total surprise given that it typically tracks the economic cycle but with a higher beta). As a result, investment to GDP ratios have started to increase again after the contraction experienced during the crisis. A particularly weak performance in Mexico weighs on investments at the regional level.

What the numbers mean: Recovery in credit, low financing costs, and an explosion in consumption have created a better environment for companies to invest. That said, overall investment levels are still rather mediocre for the region to approach Asian-style growth rates.

12-month outlook: We expect investment to remain the most important contributor to growth in the quarters to come. This is particularly true in Brazil, Chile and Peru, primarily in energy, mining and key manufacturing sectors. These dynamics can also be fuelled by the various government incentive programs to promote investments.

Chart 17: LatAm total real investment Chart 18: LatAm total real investment (Q1-07=100)

-20-15

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05

1015

2025

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160y /y % grow thIndex Q1-04=100 (RHS)

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Chart 19: Real fixed capital investment growth 2/ Chart 20: Fixed capital investment (% of GDP, 4q ma)

-5

0

5

10

1520

25

30

35

40


y /y %, NSA q/q %, SA

15

17

19

21

23

25

27

Q1-0

4

Q3-0

4

Q1-0

5

Q3-0

5

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Q3-0

7

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8

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8

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9

Q1-1

0ARG BRA CHI COL MEX PER

Source: UBS and Haver.

2/ All data corresponds to Q2-10.

Source: UBS and Haver


UBS 7

Trade What the numbers say: Both export and import growth have recovered fully from the global crisis. Over the past

couple of months, however, we have started to see a decline in y/y growth rates pretty much across the board. Import growth is now outpacing export growth by about 5 percentage points, explaining the slow but steady erosion in the region’s trade surplus.

What the numbers mean: The stabilization in growth rates largely reflect base effects and the completion of the restocking domestically and abroad. Nevertheless, performance on both exports and imports remains quite strong, and supported by commodity prices and large growth differentials with the rest of the world, respectively.

12-month outlook: It is safe to say that net export contribution to growth for most of the countries we follow will be negative in the many quarters to come. This is simply another way of saying that many LatAm economies are growing at above global growth averages. Needless to say that recent currency strength will only worsen these dynamics. Higher commodity prices, though, should continue to support exports when measured in nominal terms. We are now expecting LatAm trade surplus to contract to US$49 billion in 2011 from US$79 billion in 2010.

Chart 21: LatAm export growth (% y/y, 3m ma) Chart 22: LatAm import growth (% y/y, 3m ma)

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Chart 23: Exports growth by country (y/y %, 3m ma) Chart 24: Imports growth by country (y/y %, 3m ma)

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UBS 8

Trade, continued

Chart 25: Aggregate trade balance (USD billion, 12m ma) Chart 26: Trade balance per country (USD billion, 12m ma)

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Chart 27: Exports (USD billion, 12m ma) 1/ Chart 28: Imports (USD billion, 12m ma)

0.0

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325ARG CHI COL PERVEN BRA (RHS) MEX (RHS)

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Source: Source: UBS and Haver.

1/ For Venezuela merchandise exports are reported.



UBS 9

Balance of payments and foreign reserves What the numbers say: The region posted a current account deficit of less than 1% of GDP in recent quarters. The

capital account surplus, on the other hand, has been increasing steadily to more than 3% of the region’s GDP in Q2. As a result, countries continue to accumulate reserves at a fast pace. Venezuela, Argentina and Chile are the only three countries showing current account surpluses, but the last two are declining at a relatively fast pace. FDI is recovering nicely in those countries with a more orthodox macro policy.

What the numbers mean: There is no shortage of dollars in the region. This is largely due to high commodity prices and attractive domestic returns in a context of near zero interest rates abroad. So many dollars around have created a number of policy dilemmas for Central Banks as they deal with tradeoffs in policy objectives between low inflation and weaker real exchange rates.

12-month outlook: We expect more of the same in the quarters to come. That is, more capital account surpluses driven by a world flooded with liquidity, being partially offset by relatively small though increasing current account deficits. We expect the region’s current account deficit to increase to 1.7% of GDP from 0.8% in 2010, with virtually all countries showing deterioration.

Chart 29: LatAm balance of payment (% of GDP, 4q ma) Chart 30: Current account (% of GDP, 4q ma)

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Chart 31: Balance of payments (% of GDP, 4q ma) Chart 32: FDI per country (US$ billion)

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50ARG CHI COL MEX PER VEN BRA (RHS)



UBS 10

Balance of payments and foreign reserves, continued

Chart 33: Terms of trade (Q1-99=100) Chart 34: Degree of openness (4q ma) 1/

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COL MEX PERVEN (RHS)

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Q4-0

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90ARG BRA COL MEXPER VEN CHI (RHS)

Source: UBS and Haver. 1/ Sum of exports and imports as percent of GDP.


Chart 35: FX Reserves (USD billion) Chart 36: Reserves (months of imports, 12m ma)

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l-09

Sep-

09No

v-09

Jan-

10M

ar-1

0M

ay-1

0Ju

l-10

Sep-

10

90

120

150

180

210

240

270

300ARG CHI COL MEX PER VEN BRA (RHS)

0

5

10

15

20

25

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0




UBS 11

Industrial production

What the numbers say: After its dramatic recovery, industrial production growth has finally stabilized at around 10% y/y rates. In September, though, we saw a significant slowdown driven by Brazil and Argentina. Performance across countries has been bifurcated between the outperformers: Brazil, Argentina and Peru and the laggards: Chile, Venezuela and Mexico.

What the numbers mean: The recent slowdown in industrial production owes to a completion of restocking, bottlenecks in key sectors and higher imports.

12-month outlook: Manufacturing is likely to slow to single digits as growth rates in leading sectors such as autos and other durables land from the moon. Recent currency strength could also play a non-trivial role affecting performance.

Chart 37: LatAm industrial production growth Chart 38: Industrial production growth by country (% y/y) 1/

-6-5-4-3-2-10123

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

-15

-10

-5

0

5

10

15% m/m % y /y (RHS)

-20-15-10-505

10152025

Jan-

07

May

-07

Sep-

07

Jan-

08

May

-08

Sep-

08

Jan-

09

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10



1/ For Argentina we use FIEL’s non-official estimates.

Chart 39: Industrial production (Jan-06=100) Chart 40: Industrial production by country (Jan-06=100) 1/

80

100

120

140

160

180

200

Jan-

06

May

-06

Sep-

06

Jan-

07

May

-07

Sep-

07

Jan-

08

May

-08

Sep-

08

Jan-

09

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10

LatAm China India US

70

87.5

105

122.5

140

Jan-

06

May

-06

Sep-

06

Jan-

07

May

-07

Sep-

07

Jan-

08

May

-08

Sep-

08

Jan-

09

May

-09

Sep-

09

Jan-

10

May

-10

Sep-

10



1/ For Argentina we use FIEL’s non-official estimates.


UBS 12

Inflation What the numbers say: Inflation targeting countries show rates well within their target band, though Mexico is an

exception on account of one-off factors that should dissipate in 2011. Within the non-inflation targeting countries, Argentina is experiencing a visible acceleration in its true inflation rate, while Venezuela is showing some stabilization at around 28%.

What the numbers mean: Despite rapid growth, inflation has so far not been much of a threat. Core inflation has essentially been flat and food inflation remarkably tamed in the face of rising international prices. Perhaps, currency strength is playing an important role driving these dynamics.

12-month outlook: We expect a gradual rise due to buoyant aggregate demand, but with the exception of Mexico, which is leaving behind the dual impact of last year's devaluation and this year's tax increases on prices. Under our forecasts, inflation in 2011 would be within Central Banks’ target bands. The risk is to the upside, though, owing in part to the impact that the dramatic increase in soft commodities could have. Food has a particularly high incidence in LatAm CPI baskets. In Argentina, we see inflation becoming an even bigger problem with rates moving into the 35% neighborhood before 2011 is over.

Chart 41: LatAm inflation (% y/y) 1/ Chart 42: LatAm inflation ex Argentina and Venezuela (% y/y)

4

5

6

7

8

9

10

11

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Headline Core

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0Ja

n-07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Headline Core


1/ For Argentina headline inflation we use Province of San Luis’ inflation.


Chart 43: LatAm CPI inflation rate by country (% y/y) Chart 44: Argentina and Venezuela CPI inflation rate (% y/y)

-4

-2

0

2

4

6

8

10

12

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

BRA CHI COL MEX PER

0

5

10

15

20

25

30

35

40

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

ARG (San Luis prov ince) ARG (INDEC) VEN



UBS 13

Monetary policy What the numbers say: Central Banks in the fastest growing countries hiked rates in the earlier part of the year but

have all decided to pause in recent meetings in the face of strengthening currencies, a slowdown in their pace of economic activity, and tamed inflation and inflation expectations. Credit growth has been picking up steam, but remains at around half the levels observed before the crisis erupted. Broad money is also growing healthily, partly a reflection of large balance of payment surpluses.

What the numbers mean: These dynamics are just a reflection of the state of the economic recovery in each of the countries. Central Banks may be behind the curve if we take into account countries’ rapid growth rates and their relatively low real interest rates

12-month outlook: We expect more hikes to come in 2011 in all the inflation targeting countries we follow. However, we must confess that with tamed inflation, the Fed to remain on hold for longer and Central Banks more concerned about currency strength, risks are becoming more balanced. We also expect credit growth to continue showing a slow and steady upward trend.

Chart 45: Central banks’ reference rates (%) Chart 46: Central Bank reference rate in real terms (%)

0

2

4

6

8

10

12

14

16

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

BRA CHI COL MEX PER

-4

-2

0

2

4

6

8

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

BRA CHI COL MEX PER


Chart 47: M2 growth by country (% y/y) Chart 48: Credit growth by country (% y/y)

-10

0

10

20

30

40

50

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep-

08

Nov-

08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10


-10%

0%

10%

20%

30%

40%

Jul-0

8

Sep-

08

Nov-

08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar

-10

May

-10

Jul-1

0

ARG PER COL BRA MEX CHI VEN



UBS 14

Fiscal accounts What the numbers say: All countries are showing small deficits in the 2% of GDP neighborhood, a drop in the

bucket relative to the numbers observed in the developed world. However, the region showed a 0.5% of GDP deficit in both 2007 and 2008, deteriorating to 3.2% in 2009. While revenues are rising sharply across the board, the picture on the spending side is more mixed.

What the numbers mean: There is some recovery in the fiscal effort, now that the crisis is behind, but this is: a) rather small relative to the magnitude of the economic recovery, and b) in most cases largely driven by a significant increase in revenues. Politics may have played an important role, as a number of countries are heading or just completed important elections, and incentives to put on the breaks at this juncture aren’t particularly high.

12-month outlook: We see a mixed picture for 2011 with some improvements taking place in Brazil, Chile Colombia, and Peru but deterioration in Argentina, and Venezuela. We see Mexico’s 2% of GDP deficit holding steady.

Chart 49: Fiscal revenues growth (% y/y, 12m ma) Chart 50: Primary expenditure growth (% y/y, 12m ma)

-15-10-505

10152025303540

Jan-

08M

ar-0

8M

ay-0

8Ju

l-08

Sep-

08No

v-08

Jan-

09M

ar-0

9M

ay-0

9Ju

l-09

Sep-

09No

v-09

Jan-

10M

ar-1

0M

ay-1

0Ju

l-10

Sep-

10

-30-20-10010203040506070ARG BRA COL MEX

PER VEN CHI (RHS)

05

1015202530354045

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep-

08

Nov-

08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10



Chart 51: Fiscal balance (% of GDP, 4q ma) Chart 52: Interest payment (% of GDP)

-7.5

-5.0

-2.5

0.0

2.5

5.0

7.5

10.0

Q1-0

6

Q3-0

6

Q1-0

7

Q3-0

7

Q1-0

8

Q3-0

8

Q1-0

9

Q3-0

9

Q1-1

0


0112233445

2004 2005 2006 2007 2008 2009 2010F

5.0

5.5

6.0

6.5

7.0

7.5ARG CHI COL MEX PER VEN BRA (RHA)



UBS 15

Debt What the numbers say: Government’s debt to GDP ratios have started to resume their slow but steady downward

trends. Venezuela is a notable exception, as the government continues to issue dollar bonds in order to inject dollar liquidity into a seemingly unsustainable FX market. External debt ratios as percent of reserves are also heading south for the most part, as LatAm countries continue to pile foreign reserves as if there is no tomorrow.

What the numbers mean: Declines in government debt ratios are largely due to a denominator effect as a result of high real GDP growth and real exchange rate appreciation pretty much across the board.

12-month outlook: Though each country faces different debt dynamics, we think that the mix of limited net financing needs and rapid dollar GDP growth point to non-rising debt ratios in the quarters to come.

Chart 53: Public debt (% of GDP) Chart 54: Debt 2000 vs 2009 (% of GDP)

0

10

20

30

40

50

60

70

2006 2007 2008 2009 2010F


05

101520253035404550


2000 2009


Chart 55: External debt (% of reserves) Chart 56: Net external public debt (USD billion) 1/

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010F


-200

-150

-100

-50

0

50

100

Q1-0

2

Q4-0

2

Q3-0

3

Q2-0

4

Q1-0

5

Q4-0

5

Q3-0

6

Q2-0

7

Q1-0

8

Q4-0

8

Q3-0

9

Q2-1

0


Source: UBS and Haver. Source: UBS and Haver. 1/ Net of foreign reserves.


UBS 16

Labor market What the numbers say: With the exception of Colombia and Mexico, the unemployment rate has been declining to

around 8%. In some countries like Brazil, unemployment is at a multi-year low. Real wage growth has also started to creep higher, particularly in Brazil. Chile is an exception, as real wages are now ‘paying back’ the rapid increase they witnessed during the crisis as a result of the deflation experienced during those days.

What the numbers mean: Much of South America is in the midst of an employment – consumption virtuous cycle that could improve labor market conditions. In Mexico, the increase in employment is somewhat deceptive to the extent that a third of the formal jobs are temporary and concentrated in lower paying sectors.

12-month outlook: The region will continue to generate jobs, though most likely at a slower pace. The picture varies from country to country. We see tighter labor markets in Brazil, Peru, Chile and to a lesser extent in Argentina. Labor conditions are much looser in Colombia and Mexico.

Chart 57: Unemployment rate (%) Chart 58: Real wage growth (nsa % y/y, 3m ma) 1/

2

4

6

8

10

12

14

16

18

Q1-0

4

Q3-0

4

Q1-0

5

Q3-0

5

Q1-0

6

Q3-0

6

Q1-0

7

Q3-0

7

Q1-0

8

Q3-0

8

Q1-0

9

Q3-0

9

Q1-1

0

ARG BRA COL MEX PER VEN

-4

-2

0

2

4

6

8M

ar-0

6

Jul-0

6

Nov-

06

Mar

-07

Jul-0

7

Nov-

07

Mar

-08

Jul-0

8

Nov-

08

Mar

-09

Jul-0

9

Nov-

09

Mar

-10

Jul-1

0

ARG BRA CHI COL MEX

Source: UBS and Haver. Source: UBS and Haver. 1/ For Argentina we use FIEL's price index

Chart 59: Employment (% y/y) Chart 60: Labor productivity (% y/y)

-10.0

-7.5

-5.0

-2.5

0.0

2.5

5.0

7.5

10.0

Q1-0

6

Q3-0

6

Q1-0

7

Q3-0

7

Q1-0

8

Q3-0

8

Q1-0

9

Q3-0

9

Q1-1

0

Q3-1

0


-10.0-7.5-5.0-2.50.02.55.07.5

10.012.515.0

Q1-0

4

Q3-0

4

Q1-0

5

Q3-0

5

Q1-0

6

Q3-0

6

Q1-0

7

Q3-0

7

Q1-0

8

Q3-0

8

Q1-0

9

Q3-0

9

Q1-1

0




UBS 17

Exchange rates What the numbers say: There has been steady appreciation in the inflation targeting countries. We started to see a

reversal after the implementation of interventionist measures to prevent currency strength. The fact that the Fed’s QE2 announcement is now behind us and that the dollar has started to recover some ground against major currencies may have also taken some of the pressure off the LatAm currencies. In those countries targeting the exchange rate such as Argentina and Venezuela, currencies have remained stable in nominal terms. On a real exchange rate basis, we have witnessed appreciations across the board.

What the numbers mean: A high carry trade in the context of a rebound in risk appetite coupled with better return prospects in the region has led to a large increase in capital inflows pretty much across the board. Measures to tame these inflows have only had a very partial impact.

12-month outlook: We think that current inflows will continue to be significant, but a higher current account deficit, more interventionist measures and rapid reserve accumulation will go a long way to prevent further strengthening. We forecast FX stability pretty much across the board, though we continue to characterize the FX policy regimes in Argentina and Venezuela as unsustainable.

Chart 61: Nominal exchange rate (Jan-07=100) Chart 62: Multilateral real exchange rate (Jan-07=100) 1/

60

70

80

90

100

110

120

130

140

Jan-

07Ap

r-07

Jul-0

7Oc

t-07

Jan-

08

Apr-0

8Ju

l-08

Oct-0

8Ja

n-09

Apr-0

9Ju

l-09

Oct-0

9Ja

n-10

Apr-1

0Ju

l-10

Oct-1

0


75

100

125

150

175

Jan-

07

Apr-0

7

Jul-0

7

Oct-0

7

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0


Source: UBS and Haver. Source: UBS and Haver. 1/ Upwards movement corresponds to a real appreciation.

Chart 63: LatAm monthly FX reserves change (USD billion) Chart 64: FX volatility (3m rolling)

-150

-100

-50

0

50

100

150

Jan-

00Se

p-00

May

-01

Jan-

02Se

p-02

May

-03

Jan-

04Se

p-04

May

-05

Jan-

06Se

p-06

May

-07

Jan-

08Se

p-08

May

-09

Jan-

10

-100

-75

-50

-25

0

25

50

75

100Headline 3-mth-ma (RHS)

0.00.51.0

1.52.02.53.0

3.54.0

03-Apr-08

05-Jun-08

07-Aug-08

09-Oct-08

11-D ec-08

12-Feb-09

16-Apr-09

18-Jun-09

20-Aug-09

22-Oc t-09

24-Dec-09

25-Feb-10

29-Apr-10

01-Jul-10

02-Sep-10

04-Nov-10




UBS 18

Stock markets What the numbers say: LatAm stock markets have done extraordinarily well in both local and dollar terms. In

most cases they are already well above pre-crisis highs. Argentina and Peru have been the leading performers, while Brazil has lagged so far this year.

What the numbers mean: There are a number of fundamental reasons we can list that support this strong showing. However, the indiscriminate rally in the EM and in the LatAm world may suggest that performance had more to do with global risk appetite than with relative domestic fundamentals.

12-month outlook: Our strategists are not believers in the EM equity bubble story. They see underlying value in a number of EM countries and within LatAm primarily in Brazil.

Chart 65: Stock price index (Jan-08=100) Chart 66: Stock price index in USD (Jan-08=100)

20406080

100120140160180200

Jan-

07M

ar-0

7Ju

n-07

Sep-

07De

c-07

Mar

-08

May

-08

Aug-

08No

v-08

Feb-

09M

ay-0

9Ju

l-09

Oct-0

9Ja

n-10

Apr-1

0Ju

l-10

Sep-

10


20406080

100120140160180200220

Jan-

07

Mar

-07

Jun-

07Se

p-07

Dec-

07M

ar-0

8M

ay-0

8

Aug-

08No

v-08

Feb-

09

May

-09

Jul-0

9Oc

t-09

Jan-

10Ap

r-10

Jul-1

0Se

p-10


Source: UBS and Bloomberg. Source: UBS and Bloomberg

Chart 67: Equity volatility (% 3m) Chart 68: PE ratios

0

5

10

15

20

25

Apr-0

7

Jun-

07

Sep-

07

Dec-

07

Feb-

08

May

-08

Jul-0

8

Oct-0

8

Dec-

08

Mar

-09

Jun-

09

Aug-

09

Nov-

09

Jan-

10

Apr-1

0

Jun-

10

Sep-

10


-

5

10

15

20

25

30

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep-

08

Nov-

08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10


Source: UBS and Bloomberg. Source: UBS and Bloomberg


UBS 19

Bond markets What the numbers say: So far this year, the market as per the EMBI+ returned nearly 16% with spreads tightening

by around 20 bps to 277 bps. Spreads of the EMBI+ Latin American component (now at around 300 bps) have widened somewhat against the broader EMBI+ index, largely due to Venezuela underperformance. Argentina (+36%) has been the best performer within the EMBI+ YTD.

What the numbers mean: Global risk appetite, continued inflows into EM debt funds, and relatively stronger economic fundamentals, including limited financing needs, explain the markets’ strong performance. But again, like in the equity-markets section before, the tide has lifted all boats rather indiscriminately, with many countries trading up and down together at the whims of the international markets. Even Venezuela, which has seen a major deterioration in credit fundamentals with debt ratios increasing sharply, hasn’t performed as poorly.

12-month outlook: We do expect a supportive global backdrop to continue. However, our strategists believe that hard currency bond spreads have come down a lot and now don’t expect more compression. They see more value in the local markets space.

Chart 69: EMBI+ Index (Jan 1, 2009 =100) Chart 70: EMBI+ spread (bps)

90

100

110

120

130

140

150

Jan-

09Fe

b-09

Mar

-09

Apr-0

9M

ay-0

9Ju

l-09

Aug-

09Se

p-09

Oct-0

9No

v-09

Dec-

09Fe

b-10

Mar

-10

Apr-1

0M

ay-1

0Ju

l-10

Aug-

10Se

p-10

Oct-1

0

Latin component (LHS)

EMBI+ (RHS)

200

300

400

500

600

700

800Ja

n-09

Feb-

09M

ar-0

9Ap

r-09

May

-09

Jul-0

9Au

g-09

Sep-

09Oc

t-09

Nov-

09De

c-09

Feb-

10M

ar-1

0Ap

r-10

May

-10

Jul-1

0Au

g-10

Sep-

10Oc

t-10

0

10

20

30

40

50

60

70

80Latin component (LHS)

Latin - EMBI+ (RHS)

Source: Datastream. Source: Datastream.

Chart 71: Embi+ index per country (Jan 1, 2009 =100) Chart 72: Embi+ spread per country (bps)

70

110

150

190

230

270

310

350

Jan-

09

Feb-

09

Mar

-09

May

-09

Jun-

09

Jul-0

9

Sep-

09

Oct-0

9

Dec-

09

Jan-

10

Feb-

10

Apr-1

0

May

-10

Jul-1

0

Aug-

10

Sep-

10

Nov-

10

ARG BRA COL MEX PAN PER VEN

0

100

200

300400

500

600

700

800

Jan-

07

Mar

-07

Jun-

07Se

p-07

Dec-

07M

ar-0

8M

ay-0

8

Aug-

08No

v-08

Feb-

09

May

-09

Jul-0

9

Oct-0

9Ja

n-10

Apr-1

0

Jul-1

0Se

p-10

0

250

500

7501000

1250

1500

1750

2000BRA COL MEX PANPER ARG (RHS) VEN (RHS)

Source: Datastream. Source: Datastream.

Javier Kulesz

Stamford, CT


UBS 20

Latin America: key macro data and forecasts

Real GDP growth (in %) 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 8.5 8.7 6.8 0.9 7.5 4.0 4.4

Brazil 4.0 6.1 5.2 -0.2 7.9 5.4 5.1

Chile 4.6 4.6 3.7 -1.5 5.3 6.0 5.1

Colombia 7.1 6.3 2.7 0.8 4.4 4.4 4.9

Mexico 4.9 3.3 1.5 -6.5 4.8 3.7 3.3

Peru 7.7 8.9 9.8 0.9 8.3 6.2 6.3

Venezuela 9.9 8.2 4.8 -3.3 -1.5 1.5 1.0

Latam 5.3 5.6 4.3 -1.9 6.3 4.6 4.3

CPI Yr End % y/y rate 2006 2007 2008 2009 2010F 2011F 2012F

Argentina (official) 9.8 8.5 7.2 7.7 11.5 13.0 24.0

Brazil 3.1 4.5 5.9 4.3 5.8 5.4 4.8

Chile 2.6 7.8 7.1 -2.6 2.8 3.4 3.5

Colombia 4.5 5.7 7.7 2.0 2.9 2.8 3.3

Mexico 4.1 3.8 6.5 3.6 4.3 3.6 3.8

Peru 1.1 3.9 6.7 0.2 2.4 3.0 3.6

Venezuela 17.0 22.5 30.9 25.1 29.0 25.0 50.0

Latam 4.8 6.0 8.5 5.7 6.8 6.7 9.5

Exchange rate lc/US$ yr end 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 3.07 3.15 3.45 3.80 3.98 4.25 5.50

Brazil 2.14 1.77 2.34 1.74 1.65 1.65 1.70

Chile 532 498 629 506 500 480 516

Colombia 2,239 2,015 2,244 2,044 1,813 1,795 1,767

Mexico 10.88 10.87 13.54 13.06 12.40 12.25 12.92

Peru 3.21 2.98 3.11 2.88 2.77 2.70 2.65

Venezuela 2.15 2.15 2.15 2.15 4.30 4.30 6.15

Source: Haver, Central Banks, Finance Ministries and UBS


UBS 21

Current Account (% of GDP) 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 3.7 2.8 2.2 3.7 1.3 -0.1 0.5

Brazil 1.28 0.1 -1.7 -1.5 -2.4 -3.4 -3.7

Chile 4.89 4.32 -1.48 2.48 -0.70 -1.85 -1.97

Colombia -1.84 -2.9 -2.8 -2.2 -1.5 -1.4 -1.0

Mexico -0.44 -0.88 -1.42 -0.62 -0.63 -1.20 -1.71

Peru 3.11 1.3 -3.7 0.2 -1.0 -1.2 -1.7

Venezuela 14.4 8.0 12.0 2.6 8.9 5.7 4.2

Latam 1.8 0.6 -0.3 -0.3 -0.8 -1.7 -2.0

Fiscal balance (% of GDP) 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 1.8 1.1 1.4 -0.6 0.0 -1.8 -2.0

Brazil -3.5 -2.7 -1.9 -3.3 -2.3 -2.0 -2.5

Chile 7.5 8.7 5.1 -4.8 0.3 2.0 2.2

Colombia -3.7 -3.0 -2.6 -4.4 -2.9 -2.3 -1.6

Mexico 0.1 0.0 -0.1 -2.3 -2.1 -2.1 -1.6

Peru 1.5 1.8 2.2 -1.8 -1.4 -0.5 0.1

Venezuela 0.0 3.1 -1.2 -6.0 -3.3 -4.3 -4.5

Latam -1.0 -0.5 -0.8 -3.2 -2.0 -2.0 -2.1

Yr End Policy Rate 2006 2007 2008 2009 2010F 2011F 2012F

Argentina NA NA NA NA NA NA NA

Brazil 13.25 11.25 13.75 8.75 10.75 12.50 11.00

Chile 5.25 6.00 8.25 0.50 3.25 5.00 6.00

Colombia 7.50 9.50 9.50 3.50 3.00 4.50 4.50

Mexico 7.00 7.50 8.25 4.50 4.50 5.75 6.00

Peru 4.50 5.00 6.50 1.25 3.25 4.75 6.25

Venezuela NA NA NA NA NA NA NA



UBS 22

Trade balance (US$ billion) 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 12.4 11.3 12.6 16.9 13.4 9.3 13.7

Brazil 46.4 40.0 25.0 25.3 17.7 1.4 7.3

Chile 22.8 23.9 8.8 14.0 11.9 10.8 10.6

Colombia 0.0 -0.7 0.8 2.1 3.6 3.9 5.2

Mexico -6.1 -10.1 -17.3 -4.6 -3.5 -11.4 -18.2

Peru 9.0 8.3 3.1 5.9 6.0 6.1 5.6

Venezuela 32.0 23.0 45.7 19.2 30.1 29.0 26.6

Latam 116.4 95.7 78.6 78.7 79.1 49.0 50.8

Public debt (% GDP) 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 64.3 55.6 44.9 47.4 40.7 32.7 33.8

Brazil 45.9 42.8 37.3 42.8 40.0 38.0 35.0

Chile 5.3 4.1 5.2 6.1 5.9 7.5 6.0

Colombia 38.3 33.2 32.0 36.2 35.1 34.0 32.5

Mexico 22.5 22.9 27.0 35.1 35.0 33.5 33.5

Peru 33.0 29.8 24.1 26.7 24.5 23.6 23.4

Venezuela 23.7 24.6 19.5 26.5 41.0 34.0 32.0

Latam 35.0 33.5 32.0 37.1 36.7 34.3 32.7

External debt (% of exports) 2006 2007 2008 2009 2010F 2011F 2012F

Argentina 233.9 222.5 178.4 224.5 179.6 169.4 169.1

Brazil 125.3 120.3 100.2 129.5 129.4 130.1 115.8

Chile 74.4 72.4 83.3 119.0 120.4 118.3 113.9

Colombia 167.8 151.4 125.3 165.1 145.5 137.1 134.2

Mexico 45.7 44.2 49.3 68.8 57.4 52.7 46.9

Peru 121.3 118.0 110.5 132.5 114.9 111.1 109.5

Venezuela 63.8 80.9 63.8 128.2 140.9 151.8 172.1

Latam 102.2 101.7 93.1 124.2 116.7 116.5 110.1



UBS 23

Key macro data and forecasts Argentina

2006 2007 2008 2009 2010F 2011F 2012FEconomic Activity and PricesGDP , ARS bill 654.4 812.5 1,032.8 1,145.5 1,489.5 1,966.0 2,524.0GDP, US$ bil. 212.7 260.4 324.8 305.8 382.9 489.0 517.8GDP per Capita, US$ 6,076 7,350 9,059 8,430 10,432 13,165 13,776Real GDP Growth, % 8.5 8.7 6.8 0.9 7.5 4.0 4.4 Private consumption, % 7.8 9.0 6.5 0.5 8.8 5.5 3.3 Government consumption, % 5.2 7.6 6.9 7.2 12.5 5.5 0.0 Capital formation, % 18.2 13.6 9.1 -10.2 17.9 6.2 9.0 Exports, % 7.3 9.1 1.2 -6.4 8.7 6.7 4.8 Imports, % 15.4 20.5 14.1 -19.0 32.4 18.4 2.9Industrial Production, % (Official) 9.5 10.1 1.8 10.9 9.7 5.2 4.3Industrial Production, % (FIEL) 7.8 7.6 -14.8 16.1 n/a n/a n/aUnemployment, % (avg) 10.2 8.5 7.9 8.7 8.0 7.9 8.5Inflation IPC, Dec/Dec % (official) 9.8 8.5 7.2 7.7 11.5 13.0 24.0Inflation IPC, Avg % (official) 10.9 8.8 8.6 6.3 10.0 12.3 18.8

Financial MarketsExchange Rate (yr end) 3.07 3.15 3.45 3.80 3.98 4.25 5.50Exchange Rate (yr avg) 3.08 3.12 3.18 3.75 3.89 4.02 4.88Interest rate - Depo 30-60 days 6.5 9.6 16.1 9.5 11.0 18.0 25.0Interest rate - Depo >60 days 7.3 11.0 16.9 10.6 11.0 21.0 25.0Badlar 30d benchmark deposit rate 9.9 13.6 19.8 10.0 13.7 23.8 24.4M2, Dec/Dec % 19.0 17.9 18.9 13.7 27.0 29.0 20.0Total private sector deposits, Dec/Dec % 20.2 22.7 4.4 14.9 28.0 10.0 5.0

Balance of Payments , USD billExports goods 46.55 55.98 70.02 55.67 69.59 77.94 85.73Imports goods 34.15 44.71 57.46 38.78 56.23 68.60 72.03Trade balance 12.40 11.28 12.56 16.89 13.36 9.34 13.70Net interest payments 1.2 0.6 1.4 2.3 1.7 2.6 2.6Other current transactions (net) -3.5 -3.3 -4.1 -3.3 -6.8 -7.3 -8.4Current account 7.77 7.36 7.04 11.29 4.86 -0.56 2.70 % of GDP 3.7 2.8 2.2 3.7 1.3 -0.1 0.5FDI (net) 3.1 5.0 8.3 3.0 2.0 2.0 4.5International reserves (end of period) 32.0 46.2 46.4 48.0 52.7 48.6 58.4Reserves / Imports (months) 11.3 12.4 9.7 14.8 11.3 8.5 9.7

Fiscal Accounts, % GDPFiscal Revenue 24.2 20.2 21.2 22.7 24.2 24.9 24.9Interest Payments 1.8 2.0 1.7 2.1 1.7 2.5 2.9 Domestic 0.6 0.7 0.6 1.0 0.9 1.2 1.4 External 1.2 1.3 1.1 1.2 0.8 1.3 1.5Non-interest spending 20.7 17.0 18.1 21.2 22.5 24.3 24.1Overall balance 1.8 1.1 1.4 -0.6 0.0 -1.8 -2.0Primary balance 3.5 3.2 3.1 1.5 1.7 0.7 0.8

Public Debt Total public debt , USD bill. 136.7 144.7 146.0 145.0 155.9 160.0 175.0Total public debt , % of GDP. 64.3 55.6 44.9 47.4 40.7 32.7 33.8 - of which external 28.7 27.2 19.8 21.3 18.5 14.9 14.9

External Debt and Debt ServiceTotal external debt , USD bill. 108.9 124.6 124.9 125.0 125.0 132.0 145.0Total external debt , % of GDP 51.2 47.8 38.5 40.9 32.6 27.0 28.0Total external debt , % of Exports 233.9 222.5 178.4 224.5 179.6 169.4 169.1Amortization, USD bill. 5.5 4.9 4.6 4.6 5.5 6.0 6.0Total debt service, USD bill 10.7 10.6 10.2 9.1 9.4 10.7 10.7Total debt service, % of exports 22.9 18.9 14.6 16.3 13.5 13.7 12.5

Credit Ratings (year-end & latest)Moody's B3 B3 B3 B3 NA NA NAS&P B+ B+ B- B- NA NA NA



UBS 24

Brazil2006 2007 2008 2009 2010F 2011F 2012F

Economic Activity and PricesGDP , BRL bill 2,369 2,661 3,032 3,144 3,567 3,970 4,380GDP, US$ bil. 1,089 1,366 1,653 1,574 2,037 2,406 2,618GDP per Capita, US$ 5,866 7,282 8,716 8,219 10,542 12,343 13,324Real GDP Growth, % 4.0 6.1 5.2 -0.2 7.9 5.4 5.1 Household consumption, % 5.3 6.3 5.7 4.1 7.9 6.1 5.3 Government consumption, % 2.6 5.1 3.2 3.7 3.8 3.0 2.9 Fixed capital formation, % 9.8 13.9 13.6 -9.9 23.3 12.5 9.5 Exports, % 5.0 6.2 0.5 -10.3 10.0 6.5 7.7 Imports, % 18.4 19.9 15.4 -11.4 36.1 16.1 10.7Industrial GDP, % 2.2 5.3 4.4 -5.5 11.0 4.7 4.5Unemployment, % (avg) 10.0 9.4 7.9 8.1 6.8 5.9 5.0IPCA inflation, Dec/Dec % 3.1 4.5 5.9 4.3 5.8 5.4 4.8IPCA inflation, Avg % 4.2 3.6 5.7 4.9 5.0 5.6 5.0

Financial MarketsExchange Rate (yr end) - R$/US$ 2.14 1.77 2.34 1.74 1.65 1.65 1.70Exchange Rate (yr avg) - R$/US$ 2.18 1.95 1.83 2.00 1.75 1.65 1.67Selic basic interest rate (yr end), % 13.25 11.25 13.75 8.75 10.75 12.50 11.00Selic basic interest rate (yr avg), % 15.06 11.98 12.54 9.92 9.90 11.21 12.06M2, Dec/Dec % 13.6 18.1 37.3 8.8 NA NA NABank lending, % of GDP 30.9 35.2 40.8 45.0 47.4 51.3 55.8

Balance of Payments, USD billExports 137.7 160.6 197.9 153.0 199.9 237.2 282.0Imports 91.3 120.6 173.0 127.6 182.2 235.9 274.7Trade balance 46.4 40.0 25.0 25.3 17.7 1.4 7.3Net interest payments -11.3 -7.3 -7.2 -9.1 -9.4 -10.0 -11.0Current account 13.6 1.6 -28.2 -24.3 -47.2 -82.2 -96.3 % of GDP 1.3 0.1 -1.7 -1.5 -2.4 -3.4 -3.7FDI (net) 18.8 34.6 45.1 25.9 30.0 35.0 45.0International reserves (end of period) 85.8 180.3 193.8 238.6 290.0 300.6 304.3Reserves / Imports (months) 11.3 17.9 13.4 22.4 19.1 15.3 13.3

Fiscal Accounts, % GDPFiscal Revenue 34.1 34.7 35.2 34.7 NA NA NAInterest Payments 6.7 6.1 5.4 5.4 5.3 5.3 5.3 Domestic 6.4 6.0 5.5 5.4 5.3 5.3 5.3 External 0.4 0.0 -0.1 0.0 0.0 0.0 0.0Non-interest spending 30.9 31.3 31.7 32.6 NA NA NAOverall balance -3.5 -2.7 -1.9 -3.3 -2.3 -2.0 -2.5Primary balance 3.2 3.4 3.5 2.1 3.0 3.3 2.8

Public Debt Net public debt , USD bill. 500 585 617 674 815 914 916Net public debt , % of GDP. 45.9 42.8 37.3 42.8 40.0 38.0 35.0


Credit Ratings (year-end & latest)Moody's Ba2 Ba1 Ba1 Baa3 Baa3 Baa2 Baa2S&P BB BB+ BBB- BBB- BBB- BBB BBB



UBS 25

Chile2006 2007 2008 2009 2010F 2011F 2012F

Economic Activity and PricesGDP , CLP Trill. 66193 85850 88074 86400 90848 96257 101176GDP, USD Bill. 146 172 140 171 175 193 205GDP per Capita, US$ 8,884 10,369 8,331 10,052 10,099 11,001 11,570Real GDP Growth, % 4.6 4.6 3.7 -1.5 5.3 6.0 5.1 Private consumption, % 7.1 7.0 4.6 0.9 8.6 5.5 5.3 Government consumption, % 7.1 7.0 4.6 6.8 3.9 2.7 1.7 Capital formation, % 2.3 11.2 18.6 -15.3 21.2 10.5 8.6 Exports, % 5.1 7.6 3.1 -5.6 -2.6 2.4 4.6 Imports, % 10.6 14.5 12.2 -14.3 21.7 9.2 5.5Industrial Production, % 3.2 4.1 0.2 -6.7 2.6 6.3 5.6Unemployment, avg % 8.0 7.1 7.8 9.7 8.6 8.1 7.8Inflation IPC, Dec/Dec % 2.6 7.8 7.1 -2.6 2.8 3.4 3.5Inflation IPC, Avg % 3.4 4.4 8.7 0.3 1.4 2.9 3.6Inflation Core IPCX, Dec/Dec % 2.6 6.5 8.6 -2.9 2.8 3.6 3.4

Financial MarketsExchange Rate, yr end 532 498 629 506 500 480 516Exchange Rate, avg 529 521 529 554 528 490 499Interest rate 3m PDBC, avg % 5.1 5.3 7.4 1.2 2.1 4.6 5.8Overnight Policy Rate, yr end % 5.25 6.00 8.25 0.50 3.25 5.00 6.00Broad money, M2, Dec/Dec % 19.5 19.8 19.5 2.4 13.3 19.5 19.5

Balance of Payments (US$ billion)Exports of goods 58.7 68.0 66.5 53.7 65.6 71.8 79.0Imports of goods 35.9 44.0 57.6 39.8 53.8 61.1 68.4Trade balance 22.8 23.9 8.8 14.0 11.9 10.8 10.6Other current transactions (net) -15.6 -16.5 -11.4 -9.8 -13.2 -14.7 -15.1Current account 7.2 7.5 -2.5 4.2 -1.3 -3.9 -4.5 % of GDP 4.9 4.3 -1.5 2.5 -0.7 -1.9 -2.0Net FDI (US$ billion) 5.1 10.0 7.2 4.7 9.0 9.0 10.0Other capital flows (net, incl errors) -10.3 -20.6 1.8 -7.3 -7.5 -5.0 -7.0Overall balance 2.0 -3.2 6.4 1.6 0.2 0.1 -1.5International reserves US$ billion, eop 19.4 16.9 23.2 25.4 25.5 25.6 24.2Reserves / Imports, mnth 5.0 4.3 3.2 3.9 6.1 5.7 5.0

Fiscal Accounts (Central gov't, % GDP)Fiscal Revenue 24.9 26.6 26.1 19.3 22.8 24.6 24.8Interest Payments 0.3 0.3 0.2 0.3 0.2 0.3 0.3Non-interest spending 17.0 17.6 20.8 23.6 22.6 22.6 22.6Overall balance 7.5 8.7 5.1 -4.8 0.3 2.0 2.2Primary balance 7.9 8.9 5.3 -4.5 0.5 2.3 2.5

Gross Public Debt (% of GDP)Total Public Debt 5.3 4.1 5.2 6.1 5.9 7.5 6.0 External debt 3.6 2.1 2.1 1.4 2.0 2.0 2.0 Domestic debt 1.7 2.0 3.1 4.7 3.9 5.5 4.0


Credit Ratings (year-end & latest)Moody's A2 A2 A2 A1 Aa3 Aa3 Aa3S&P A A+ A+ A+ AA- AA- AA-



UBS 26

Colombia2006 2007 2008 2009 2010F 2011F 2012F

Economic Activity and PricesGDP , COP trill 383.3 431.8 478.4 497.8 533.9 572.3 619.0GDP, US$ Bill. 162.5 207.8 243.4 230.7 276.8 317.2 347.6GDP per Capita, US$ 3,744 4,731 5,476 5,129 6,085 6,894 7,467Real GDP Growth, % 7.1 6.3 2.7 0.8 4.4 4.4 4.9 Private consumption, % 7.9 7.0 2.3 1.0 4.5 4.1 4.0 Government consumption, % 4.9 4.3 2.5 2.6 5.8 2.5 1.3 Capital formation, % 16.8 14.0 4.8 3.2 5.5 8.0 8.4 Exports, % 7.7 7.2 8.8 -3.9 3.8 8.6 4.7 Imports, % 20.3 15.1 8.8 -9.0 14.1 9.0 3.8Industrial Production, % 11.0 10.7 -2.9 -6.1 2.3 4.8 4.5Unemployment, avg % 12.0 11.2 11.3 12.0 12.1 11.5 11.5Inflation IPC, Dec/Dec % 4.5 5.7 7.7 2.0 2.9 2.8 3.3Inflation IPC, Avg % 4.3 5.5 7.0 4.2 1.5 2.8 3.1Output per person (2004=100) 111.5 118.3 118.9 113.0 NA NA NA

Financial MarketsExchange Rate, yr end 2,239 2,015 2,244 2,044 1,813 1,795 1,767Exchange Rate, avg 2,359 2,078 1,965 2,158 1,929 1,804 1,781Interest rate Dep 1-6 mths, avg % 6.27 8.01 9.74 6.14 3.50 4.50 5.00BDLR Intervention Rate, yr end % 7.50 9.50 9.50 3.50 3.00 4.50 4.50M2, Dec/Dec % 17.4 17.9 17.1 5.4 9.5 10.0 10.0M2, % of GDP 31.0 31.9 33.4 35.3 35.7 36.5 37.4

Balance of Payments (US$ billion)Exports of goods 23.9 29.4 37.1 32.6 39.6 45.1 50.5Imports of goods 24.0 30.1 36.3 30.5 36.0 41.2 45.3Trade balance 0.0 -0.7 0.8 2.1 3.6 3.9 5.2Other current transactions (net) -2.9 -5.3 -7.7 -7.2 -7.8 -8.2 -8.5Current account -3.0 -6.0 -6.9 -5.1 -4.2 -4.3 -3.3 % of GDP -1.8 -2.9 -2.8 -2.2 -1.5 -1.4 -1.0Net FDI (US$ billion) 5.6 8.1 8.3 4.2 6.4 6.6 5.5Other capital flows (net, incl errors) -2.5 2.5 1.2 2.3 1.0 0.7 0.1Overall balance 0.0 4.7 2.6 1.3 3.1 3.0 2.3International reserves US$ billion, eop 15.4 21.0 24.0 25.4 28.5 31.5 33.8Reserves / Imports, mnth 7.7 8.4 7.9 10.0 9.5 9.2 8.9

Fiscal Accounts (Central gov't, % GDP)Fiscal Revenue 14.7 15.0 15.7 15.5 16.6 16.9 17.3Interest Payments 3.5 3.5 2.9 2.9 2.6 2.7 3.0 Domestic 2.5 2.6 2.1 2.2 2.2 2.1 2.2 External 1.0 0.9 0.8 0.8 0.5 0.6 0.8Non-interest spending 14.5 14.0 14.8 16.6 16.9 16.5 15.9Overall balance -3.7 -3.0 -2.6 -4.4 -2.9 -2.3 -1.6Primary balance 0.2 1.0 0.9 -1.1 -0.3 0.4 1.4

Gross Public Debt (% of GDP) Central Govt Public Debt 38.3 33.2 32.0 36.2 35.1 34.0 32.5 External debt 14.5 11.4 10.0 12.6 11.6 10.9 10.4 Domestic debt 23.8 21.8 22.0 23.6 23.5 23.1 22.0Total Public Sector Debt 47.5 43.7 42.8 45.8 43.2 41.0 38.8

External Debt and Debt ServiceTotal external debt , USD bill. 40.1 44.5 46.5 53.8 57.6 61.9 67.8Total external debt , % of GDP 24.7 21.4 19.1 23.3 20.8 19.5 19.5Total external debt , % of Exports 167.8 151.4 125.3 165.1 145.5 137.1 134.2Amortization, USD bill. 3.2 3.0 3.1 3.9 3.1 3.1 NATotal debt service, USD bill 6.0 6.2 6.4 7.0 6.2 6.1 6.1Total debt service, % of exports 25.1 20.9 17.2 21.4 15.7 13.6 NA

Credit Ratings (year-end & latest)Moody's Ba3 Ba2 Ba1 Baa3 NA NA NAS&P BB+ BB+ BBB- BBB- NA NA NA



UBS 27

Mexico2006 2007 2008 2009 2010F 2011F 2012F

Economic Activity and PricesGDP , MXN bn 10382 11208 12131 11823 12957 14075 15230GDP, USD Bill. 961.6 1028.8 888.5 905.2 1079.7 1197.8 1269.1GDP per Capita, US$ 9,036 9,571 8,185 8,339 9,906 10,889 11,457Real GDP Growth, % 4.9 3.3 1.5 -6.5 4.8 3.7 3.3 Private consumption, % 5.6 4.0 1.9 -6.1 3.0 3.5 3.0 Government consumption, % 1.9 3.1 0.9 2.3 2.2 1.2 0.8 Capital formation, % 9.9 6.9 4.4 -10.1 3.4 6.0 6.2 Exports, % 9.3 5.7 0.5 -14.8 20.2 9.0 7.0 Imports, % 7.6 7.1 2.8 -18.2 19.1 9.1 7.2Industrial Production, % 5.7 2.0 -0.6 -7.3 6.3 3.9 2.5Unemployment, avg % 3.5 3.6 5.3 5.3 4.9 3.6 2.9Inflation IPC, Dec/Dec % 4.1 3.8 6.5 3.6 4.3 3.6 3.8Inflation IPC, Avg % 3.6 4.0 5.1 5.3 4.1 3.4 3.8Inflation Core, Dec/Dec % 3.8 4.1 5.7 4.5 3.6 3.3 3.3

Financial MarketsExchange Rate, yr end 10.88 10.87 13.54 13.06 12.40 12.25 12.92Exchange Rate, avg 10.92 10.95 11.17 13.58 12.57 12.28 12.61Interest rate 3m Cetes, avg % 7.20 7.46 8.01 5.11 4.77 6.04 7.34Banxico Overnight Rate, yr end % 7.00 7.50 8.25 4.50 4.50 5.75 6.00Broad money, M2, Dec/Dec % 12.9 10.7 17.1 4.7 9.9 12.6 12.7

Balance of Payments (US$ billion)Exports of goods 249.9 271.9 291.3 229.8 291.4 317.1 338.5Imports of goods 256.1 281.9 308.6 234.4 294.9 328.6 356.7Trade balance -6.1 -10.1 -17.3 -4.6 -3.5 -11.4 -18.2Other current transactions (net) 1.4 1.4 1.1 -1.0 -2.7 -2.4 -2.6Current account -4.8 -8.7 -16.2 -5.6 -6.2 -13.8 -20.9 % of GDP -0.4 -0.9 -1.4 -0.6 -0.6 -1.2 -1.7Net FDI (US$ billion) 14.2 19.2 22.5 4.9 14.8 18.0 20.0Other capital flows (net, incl errors) -10.4 -0.2 1.1 6.0 24.3 16.0 2.0Overall balance -1.0 10.3 7.4 5.3 25.4 20.2 -4.9International reserves US$ billion, eop 67.7 78.0 85.4 90.8 116.2 136.4 131.6Reserves / Imports, mnth 2.9 3.1 3.1 4.2 4.4 4.6 4.6

Fiscal Accounts (Central gov't, % GDP)Fiscal Revenue 21.8 22.2 23.6 23.8 24.8 24.1 24.1Interest Payments 2.4 2.1 1.9 2.2 2.1 2.0 2.1 Domestic 1.7 1.5 1.3 1.7 1.6 1.6 1.6 External 0.8 0.6 0.6 0.6 0.5 0.5 0.5Non-interest spending 19.3 20.0 21.8 23.9 24.8 24.2 23.6Overall balance 0.1 0.0 -0.1 -2.3 -2.1 -2.1 -1.6Primary balance 2.5 2.2 1.8 -0.1 0.0 -0.1 0.5PSBR -0.8 -1.1 -1.6 -2.7 -2.6 -2.6 -2.1



Credit Ratings (year-end & latest)Moody's Baa1 Baa1 Baa1 Baa1 Baa1 Baa2 Baa2S&P BBB BBB+ BBB+ BBB BBB BBB BBB



UBS 28

Peru2006 2007 2008 2009 2010F 2011F 2012F

Economic Activity and PricesGDP , PEN bill 302.3 335.2 372.6 381.7 422.5 461.1 506.3GDP, US$ Bill. 92.3 107.1 127.4 126.7 149.5 168.6 189.3GDP per Capita, US$ 3,324 3,795 4,462 4,388 5,120 5,707 6,335Real GDP Growth, % 7.7 8.9 9.8 0.9 8.3 6.2 6.3 Private consumption, % 6.4 8.3 8.7 2.4 6.5 6.7 6.5 Government consumption, % 7.6 4.5 2.1 16.5 13.4 5.1 3.1 Capital formation, % 26.5 26.3 25.0 -20.9 25.3 9.0 8.7 Exports, % 0.8 6.2 8.8 -2.5 7.8 1.6 1.6 Imports, % 13.1 21.3 19.8 -18.4 23.8 6.7 4.7Industrial Production, % 6.8 9.6 8.9 -7.3 13.5 10.5 8.5Unemployment, avg % 8.5 8.4 8.4 8.4 7.8 7.6 7.6Inflation IPC, Dec/Dec % 1.1 3.9 6.7 0.2 2.4 3.0 3.6Inflation IPC, Avg % 2.0 1.8 5.8 2.9 1.3 2.7 3.3Output per personm (2004=100) 111.0 116.0 126.5 124.7 NA NA NA

Financial MarketsExchange Rate, yr end 3.21 2.98 3.11 2.88 2.77 2.70 2.65Exchange Rate, avg 3.27 3.13 2.93 3.01 2.83 2.74 2.68Interest rate Dep 1-6 mths, avg % 4.81 4.95 5.45 4.35 2.50 4.00 4.25BDLR Intervention Rate, yr end % 4.50 5.00 6.50 1.25 3.25 4.75 6.25Broad money, M2, Dec/Dec % 18.0 34.5 23.1 11.1 18.7 9.2 9.8

Balance of Payments (US$ billion)Exports of goods 23.8 27.9 31.5 26.9 33.3 36.6 39.8Imports of goods 14.8 19.6 28.4 21.0 27.3 30.5 34.1Trade balance 9.0 8.3 3.1 5.9 6.0 6.1 5.6Other current transactions (net) -6.1 -6.9 -7.8 -5.6 -7.5 -8.2 -8.8Current account 2.9 1.4 -4.7 0.2 -1.5 -2.1 -3.2 % of GDP 3.1 1.3 -3.7 0.2 -1.0 -1.2 -1.7FDI (US$ billion) 3.5 5.5 6.9 4.8 5.0 4.8 5.5Other capital flows (net, incl errors) -3.6 2.8 1.0 -4.0 8.3 2.6 1.5Overall balance 2.8 9.7 3.2 1.0 11.8 5.3 3.8International reserves US$ billion, eop 17.3 27.7 31.2 33.2 45.0 50.3 54.1Reserves / Imports, mnth 14.0 17.0 13.2 18.9 19.8 19.8 19.0

Fiscal Accounts (Central gov't, % GDP)Fiscal Revenue 17.6 18.3 18.4 16.0 17.1 17.4 17.7Interest Payments 1.8 1.6 1.4 1.3 1.2 1.1 1.1 Domestic 0.4 0.4 0.5 0.5 0.4 0.4 0.4 External 1.4 1.3 0.9 0.8 0.8 0.7 0.8Non-interest spending 14.3 14.8 14.8 16.6 17.3 16.9 16.5Overall balance 1.5 1.8 2.2 -1.8 -1.4 -0.5 0.1Primary balance 3.2 3.5 3.6 -0.6 -0.2 0.6 1.2Nonfinancial public sector balance 2.1 3.1 2.1 -1.9 -1.6 -1.2 -0.6


External Debt and Debt ServiceTotal external debt , USD bill. 28.9 32.9 34.8 35.6 38.3 40.6 43.5Total external debt , % of GDP 31.3 30.7 27.4 28.1 25.6 24.1 23.0Total external debt , % of Exports 121.3 118.0 110.5 132.5 114.9 111.1 109.5Amortization, USD bill. 1.2 5.6 2.6 1.8 3.5 1.2 NATotal debt service, USD bill 2.5 7.0 3.7 2.9 5.2 3.0 NATotal debt service, % of exports 10.7 25.1 11.8 10.7 15.7 8.2 NA

Credit Ratings (year-end & latest)Moody's Ba3 Ba2 Ba1 Baa3 NA NA NAS&P BB+ BB+ BBB- BBB- NA NA NA



UBS 29

Venezuela2006 2007 2008 2009 2010F 2011F 2012F

Real Activity and PricesGDP, VEF bill 394 486 668 700 1,005 1,422 2,147GDP, US$ Bill. 183.7 226.8 311.5 326.5 235.3 330.6 410.9GDP per Capita, US$ 6,832 8,312 11,231 11,585 8,215 11,357 13,885Real GDP Growth, % 9.9 8.2 4.8 -3.3 -1.5 1.5 1.0 Private consumption, % 15.5 18.7 7.1 -3.2 NA NA NA Government consumption, % 9.6 6.1 6.7 2.3 NA NA NA Capital formation, % 29.3 25.3 -3.3 -8.2 NA NA NA Exports, % -3.0 -7.0 -2.7 -12.9 NA NA NA Imports, % 34.8 29.9 3.8 -19.6 NA NA NAIndustrial Production, % (real) 10.1 6.9 1.4 -11.9 -5.0 1 2.1Unemployment, % (avg) 10.0 8.5 7.4 7.9 8.7 8.5 9.1Inflation IPC, Dec/Dec % 17.0 22.5 30.9 25.1 29.0 25 50Inflation IPC, Avg % 13.7 18.7 30.4 27.1 27.0 27.0 37.5Output per Employed Person (2000=100) 100.4 105.2 107.0 101.3 98.2 98.0 97.4

Financial MarketsExchange Rate (yr end) 2.2 2.2 2.2 2.2 4.3 4.3 6.2Exchange Rate (yr avg) 2.2 2.2 2.2 2.2 4.3 4.3 6.0Interest rate (Dep 30days) - (yr avg) 10.2 10.6 15.8 16.0 15.3 14.6 25.0Broad Money Dec/Dec % change 69.3 27.8 26.9 21.1 30.0 35.0 40.0M2, % of GDP 30.4 31.5 29.1 33.6 30.5 29.1 26.9

Balance of Payments (US$ billion)Exports of goods 65.6 69.0 95.1 57.6 64.7 64.3 62.6Imports of goods 33.6 46.0 49.5 38.4 34.6 35.3 36.0Trade balance 32.0 23.0 45.7 19.2 30.1 29.0 26.6Other current transactions (net) -5.5 -4.9 -8.3 -10.6 -9.2 -10.2 -9.5Current account 26.5 18.1 37.4 8.6 20.9 18.8 17.1 % of GDP 14.41 7.96 12.00 2.62 8.88 5.70 4.15Net FDI (US$ billion) -2.0 1.0 -0.9 -4.9 -5.5 -5.0 -2.0Other capital flows (net, incl errors) -19.5 -24.8 -27.2 -13.9 -21.9 -13.8 -15.1Overall balance 5.0 -5.7 9.3 -10.3 -6.5 0.0 0.0International reserves US$ billion (end of period 36.7 33.5 42.3 36.5 30.0 30.0 30.0Reserves / Imports (months) 13.1 8.7 10.3 11.4 10.4 10.2 10.0

Fiscal Accounts (Central gov't, % GDP)Fiscal Revenue 29.7 29.1 24.9 19.8 27.0 25.5 28.5Interest Payments 2.1 1.5 1.3 1.8 2.8 2.6 2.5 Domestic 0.8 0.5 0.5 0.8 1.0 1.1 1.2 External 1.3 1.0 0.8 1.0 1.8 1.5 1.4Non-interest spending 27.7 24.5 24.8 24.0 27.5 27.2 30.5Overall balance 0.0 3.1 -1.2 -6.0 -3.3 -4.3 -4.5Primary balance 2.0 4.6 0.1 -4.2 -0.5 -1.7 -2.0

Public debt (% of GDP)Total Public Debt 23.7 24.6 19.5 26.5 41.0 34.0 32.0 External debt 14.5 17.2 15.0 18.9 33.0 25.0 22.8 Domestic debt 9.2 7.4 4.6 7.6 8.0 9.0 9.3

External debt and debt serviceTotal Private and Public External Debt (US$ bn) 41.8 55.9 60.7 73.8 91.2 97.6 107.7Total External Debt / GDP in % 22.8 24.6 19.5 22.6 38.7 29.5 26.2Total External Debt / Exports in % 63.8 80.9 63.8 128.2 140.9 151.8 172.1Amortization, USD bill. 7.4 4.0 7.1 2.1 2.7 4.3 NATotal debt service, USD bill. 9.9 6.8 10.2 5.0 5.2 6.9 NATotal debt service, % of exports 15.0 9.8 10.7 8.7 8.0 10.7 NA

Credit ratings (yr end & latest)Moody's B2 B2 B2 B2 NA NA NAS&P BB- BB- BB- BB- NA NA NA



UBS 30

High Frequency macro indicators

Source for Tables that follow on pages 31-37 is Haver.

Latin American Econom

ic Focus 15 November 2010

UBS 31

Argentina Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsEconomic Activity Indicator (NSA, 1993=100) N.A. N.A. 180.6 178.5 181.2 194.4 182.2 176.0 156.3 151.3 174.9 171.9 166.8 165.3

y/y % change, NSA N.A. N.A. 8.47 8.12 11.99 13.42 10.09 8.44 6.47 5.22 4.79 2.44 0.60 0.49m/m % change, SA N.A. N.A. 0.34 -0.23 -0.78 1.47 1.44 1.10 1.18 0.35 1.50 1.03 0.43 0.18

Industrial Production INDEC (NSA, 2006=100) N.A. 133.0 128.8 120.6 117.4 123.4 123.4 119.7 109.6 103.8 126.7 121.4 121.4 120.8y/y % change, NSA N.A. 10.10 10.09 7.68 9.72 10.18 10.18 10.63 11.04 5.17 10.95 4.03 1.25 -0.25m/m % change, SA N.A. 1.21 2.32 -0.82 -0.41 0.25 1.41 0.33 3.36 -8.37 8.94 1.22 0.70 1.69Industrial Production: FIEL (NSA, 1993=100) N.A. 172.2 167.9 158.9 163.6 157.4 155.5 158.5 133.9 133.6 148.6 150.5 160.5 159.8y/y % change, NSA N.A. 7.76 8.11 3.52 9.07 9.92 10.13 11.62 15.53 12.46 14.57 10.58 0.31 -4.77

m/m % change, SA N.A. 0.57 2.66 -2.77 1.15 0.90 0.26 -0.83 1.17 1.85 0.07 1.81 0.34 0.13Synthetic Indicator of Construction Activity (NSA, 2004=100) N.A. 176.9 170.8 161.0 160.8 165.8 165.2 170.3 148.3 150.4 146.9 158.0 166.5 163.3

y/y % change, NSA N.A. 8.33 8.03 6.34 10.14 11.73 12.53 18.10 5.18 2.24 2.58 1.87 1.34 -1.69m/m % change, SA N.A. 0.42 2.04 -2.00 -1.49 0.48 -2.28 6.54 0.56 6.26 -1.89 0.20 -0.26 -0.52

ConsumptionTotal Supermarket Sales: Constant Prices (SA, Apr 2008=100) N.A. 145.6 145.3 142.6 145.3 140.2 136.3 134.5 133.7 133.5 127.3 126.0 123.9 123.2y/y % change, SA N.A. 18.18 18.32 12.91 19.20 17.62 12.37 13.03 13.21 13.81 10.03 7.33 5.99 6.57

m/m % change, SA N.A. 0.21 1.89 -1.86 3.64 2.86 1.34 0.60 0.15 4.87 1.03 1.69 0.57 0.33Total Shopping Center Sales: Constant Prices (SA, Apr 2008=100) N.A. 143.7 142.8 146.1 147.9 151.0 142.1 139.5 137.1 126.1 128.1 126.8 128.3 119.7y/y % change, SA N.A. 20.05 23.85 41.57 23.87 40.20 37.56 43.81 33.63 25.47 16.14 25.17 23.01 10.42

m/m % change, SA N.A. 0.63 -2.26 -1.22 -2.05 6.26 1.86 1.75 8.72 -1.56 1.03 -1.17 7.18 3.82

InvestmentCapacity Utilization (NSA, %) N.A. 82.3 79.1 75.2 75.0 76.7 79.5 75.3 76.9 66.6 79.8 78.4 75.7 77.8

Foreign TradeGoods Exports (NSA, Mil.US$) N.A. 6,401.0 6,369.0 6,004.0 6,353.0 6,521.0 6,222.0 4,714.0 4,060.0 4,423.0 4,820.0 4,865.0 4,806.0 4,535.0y/y % change N.A. 41.1 46.5 22.1 21.9 25.4 23.2 10.6 3.0 19.1 15.9 -0.6 -21.8 -34.6

12 mth accumulated N.A. 65,558.0 63,692.0 61,671.0 60,583.0 59,440.0 58,121.0 56,949.0 56,496.0 56,378.0 55,668.0 55,005.0 55,034.0 56,375.0Imports of Goods (NSA, Mil.US$) N.A. 5,334.0 5,315.0 5,121.0 5,062.0 4,574.0 4,101.0 4,403.0 3,456.0 3,206.0 3,599.0 3,651.0 3,656.0 3,666.0y/y % change N.A. 45.5 63.3 42.8 39.9 72.0 47.7 52.5 29.8 16.2 4.1 -12.0 -28.7 -31.012 mth accumulated N.A. 51,478.0 49,810.0 47,750.0 46,215.0 44,772.0 42,858.0 41,534.0 40,019.0 39,226.0 38,780.0 38,639.0 39,137.0 40,610.0Goods Trade Balance (NSA, Mil.US$) N.A. 1,067.0 1,054.0 883.0 1,291.0 1,947.0 2,121.0 311.0 604.0 1,217.0 1,221.0 1,214.0 1,150.0 869.0

12 mth accumulated N.A. 14,080.0 13,882.0 13,921.0 14,368.0 14,668.0 15,263.0 15,415.0 16,477.0 17,152.0 16,888.0 16,366.0 15,897.0 15,765.0PricesConsumer Price Index (NSA, Apr 2008=100) N.A. 120.95 120.08 119.20 118.25 117.39 116.52 115.56 114.26 112.85 111.69 110.66 109.75 108.88y/y % change, NSA N.A. 11.09 11.10 11.20 11.00 10.66 10.21 9.66 9.12 8.24 7.69 7.06 6.54 6.15

m/m % change, SA N.A. 0.69 0.78 0.95 0.87 0.93 0.79 0.88 1.42 0.86 0.79 0.80 0.80 0.70 Food and Beverages N.A. 0.71 0.49 1.00 1.16 1.02 1.03 1.84 2.26 1.98 1.19 1.04 0.81 0.76

Clothing and Accessories N.A. -0.29 2.22 2.97 1.53 0.17 -1.08 -1.94 4.12 3.62 0.48 0.53 0.74 0.18 Housing N.A. 0.31 0.56 0.25 0.60 0.43 0.12 0.12 0.54 0.14 0.38 0.62 1.18 0.63 Health N.A. 0.66 2.60 0.41 0.69 0.91 0.67 0.69 1.21 0.64 0.10 0.80 0.75 0.86 Transportation and Communication N.A. 0.50 0.45 0.39 0.85 0.76 0.65 0.32 0.25 0.03 0.19 0.54 0.05 0.53 Entertainment N.A. 1.95 0.79 2.60 1.54 0.64 -0.24 3.15 1.44 -0.71 1.03 0.88 0.46 0.62

Other Goods and Services N.A. 0.38 0.53 0.56 -0.14 0.74 0.60 0.30 0.45 -0.35 0.42 0.91 1.23 0.24

Financial VariablesExchange Rate (Pesos/US$) 3.96 3.95 3.94 3.93 3.93 3.90 3.89 3.88 3.85 3.82 3.80 3.81 3.82 3.84

y/y % change 3.66 2.86 2.34 2.61 3.42 4.00 5.42 4.58 8.15 9.46 10.14 13.06 13.02 22.68Interest Rate Time Deposits in US$, 7 to 59 days (%) N.A. 0.31 0.32 0.31 0.29 0.28 0.30 0.32 0.36 0.40 0.39 0.58 0.64 0.70

Central BankInternational Reserves (EOP, Mil.US$) 51,918 51,125 50,348 51,073 49,240 49,000 48,067 47,460 47,758 48,129 47,967 47,072 46,277 45,348y/y % change 12.19 12.74 11.83 10.91 6.98 5.27 3.66 2.04 1.56 2.38 3.41 2.17 2.97 -3.76m/m % change 1.55 1.54 -1.42 3.72 0.49 1.94 1.28 -0.62 -0.77 0.34 1.90 1.72 2.05 0.73Monetary Base (Mil.Pesos) N.A. 137,879 135,536 133,808 126,748 123,554 120,496 120,224 119,268 121,668 118,661 109,548 107,280 106,268y/y % change N.A. 29.75 28.72 26.28 22.28 23.99 20.69 18.63 16.09 15.74 11.48 8.31 4.71 4.57

m/m % change N.A. 1.73 1.29 5.57 2.59 2.54 0.23 0.80 -1.97 2.53 8.32 2.11 0.95 0.93

Money and CreditMonetary Aggregates: M2 (NSA, Mil.Pesos) N.A. 221,250 217,360 217,793 206,255 201,077 199,221 197,508 203,266 204,112 196,795 180,950 179,144 178,674

y/y % change N.A. 23.8 24.2 23.8 17.8 19.1 19.8 18.0 18.4 14.4 13.6 13.5 10.5 9.7m/m % change N.A. 1.8 -0.2 5.6 2.6 0.9 0.9 -2.8 -0.4 3.7 8.8 1.0 0.3 2.1

Priv Sector CD in Pesos (Thous.Pesos) N.A. N.A. 75,308,620 72,405,827 69,900,375 68,162,033 69,419,482 68,215,719 66,352,359 65,811,930 63,686,456 64,298,705 63,644,946 60,482,700y/y % change N.A. N.A. 27.3 25.3 24.3 18.8 18.7 16.5 10.9 13.0 16.1 2.9 1.9 -7.6m/m % change N.A. N.A. 4.0 3.6 2.6 -1.8 1.8 2.8 0.8 3.3 -1.0 1.0 5.2 2.2Priv Sector CD in foreign currency (Thous. Pesos) N.A. N.A. 23,398,716 23,119,394 22,885,734 22,203,945 21,978,795 21,718,271 21,614,377 21,641,471 22,110,230 21,476,781 21,977,048 22,326,547y/y % change N.A. N.A. 5.8 8.1 11.8 8.9 6.7 7.9 19.9 26.8 34.7 39.3 37.9 55.1

m/m % change N.A. N.A. 1.2 1.0 3.1 1.0 1.2 0.5 -0.1 -2.1 2.9 -2.3 -1.6 1.0Priv Sector total deposits (Thous.Pesos) N.A. N.A. 228,518,438 222,508,049 218,983,713 210,981,757 209,846,616 204,079,481 197,915,997 199,006,246 198,206,014 191,034,684 188,973,126 184,289,904

y/y % change N.A. N.A. 24.7 24.9 22.9 20.6 20.0 18.7 16.3 17.5 20.0 12.8 13.6 7.8m/m % change N.A. N.A. 2.7 1.6 3.8 0.5 2.8 3.1 -0.5 0.4 3.8 1.1 2.5 0.6

Total Credit to Private Sector (Thous.Pesos) N.A. N.A. 181,384,639 176,425,082 172,919,561 170,032,444 165,266,949 159,801,378 155,907,347 153,958,869 154,945,488 151,206,053 149,326,963 147,547,316y/y % change N.A. N.A. 23.2 19.8 16.6 15.3 13.6 10.3 8.8 9.1 9.5 7.2 5.8 7.0

m/m % change N.A. N.A. 4,959,557 3,505,521 2,887,117 4,765,495 5,465,571 3,894,031 1,948,478 -986,619 3,739,435 1,879,090 1,779,647 320,936

Fiscal accountsTotal Revenues (Mil.Pesos) N.A. 31,671 28,138 32,700 31,089 28,254 24,498 24,009 23,059 22,744 35,627 24,058 21,111 20,722y/y % change N.A. 52.8 41.6 46.5 29.1 43.9 33.6 38.1 30.3 17.5 88.7 38.3 5.7 6.4

Total Expenses (Mil.Pesos) N.A. 31,743 25,863 30,025 31,382 25,679 25,515 25,207 23,368 22,305 38,516 21,732 22,951 22,902y/y % change N.A. 52.8 41.6 46.5 29.1 43.9 33.6 38.1 30.3 17.5 88.7 38.3 5.7 6.4

Interest payments (Mil.Pesos) N.A. 3,301 447 1,239 3,010 442 2,900 2,422 1,518 600 7,967 477 2,542 2,404y/y % change N.A. 37.3 -43.0 -7.3 18.0 79.6 13.3 48.7 57.2 -37.3 35.1 37.7 66.3 81.6

Overall balance (Mil.Pesos) N.A. -72 2,275 2,675 -293 2,575 -1,017 -1,198 -310 439 -2,889 2,326 -1,839 -2,18012 mth accumulated N.A. 2,672 564 -1,955 -5,200 -6,547 -8,453 -9,152 -8,686 -7,738 -7,131 -13,701 -14,457 -11,537

Primary balance (Mil.Pesos) N.A. 4,146 5,795 6,518 3,468 6,486 2,385 1,948 2,592 2,915 1,577 5,030 1,109 1,12212 mth accumulated N.A. 43,968 40,944 37,433 33,079 31,651 29,168 28,011 27,256 27,598 28,695 20,975 19,036 21,085



UBS 32

Brazil Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsGross Domestic Product Mthly (SA, Mil.Reais) N.A. 293,508 288,855 287,081 298,198 297,762 292,694 294,644 286,744 280,195 298,652 273,186 261,716 266,895y/y % change, NSA N.A. 10.0 9.9 10.0 14.6 16.2 14.3 17.6 15.6 13.7 23.6 7.4 -1.5 2.9m/m % change, SA N.A. 1.6 0.6 -3.7 0.1 1.7 -0.7 2.8 2.3 -6.2 9.3 4.4 -1.9 1.5Industrial Production (NSA, 2002=100) N.A. 133.9 136.4 133.6 128.2 131.0 124.9 133.5 112.2 113.8 118.3 128.6 134.0 125.9y/y % change, NSA N.A. 6.3 8.6 8.7 11.1 14.8 17.3 20.2 18.2 16.1 19.0 5.3 -3.1 -7.6m/m % change, SA N.A. -0.2 -0.2 0.5 -1.2 -0.2 -0.9 3.4 1.3 1.1 0.0 -0.7 3.0 1.9Total Production of Vehicles (NSA, Units) 321,814 304,948 338,939 318,308 306,193 322,547 290,325 339,579 249,799 246,355 252,759 291,492 317,203 273,409y/y % change, NSA 1.5 11.5 14.9 12.9 7.7 19.7 14.3 23.4 22.2 33.2 160.4 47.7 6.7 -9.1m/m % change, SA 8.7 -6.7 5.0 6.5 -9.2 12.3 -14.8 14.7 -1.5 5.1 -4.7 -9.8 21.6 -5.0

Business cycle indicators and surveysConsumer Confidence Index (Scale 0 to 200) N.A. N.A. 162.3 155.2 158.9 152.9 152.1 156.7 159.0 158.7 155.2 153.1 154.3 146.1y/y % change N.A. N.A. 16.1 11.0 18.1 21.6 21.8 22.2 19.7 27.5 22.2 15.5 11.0 4.4m/m % change N.A. N.A. 4.5 -2.3 4.0 0.5 -2.9 -1.5 0.2 2.2 1.3 -0.7 5.6 4.5

ConsumptionRetail Trade Volume (NSA, 2003=100) N.A. 183.3 187.1 179.9 172.3 174.3 165.0 193.6 153.6 161.3 204.3 165.7 170.9 173.0y/y % change, NSA N.A. 11.8 10.5 11.1 11.4 10.2 9.2 15.7 12.2 10.4 9.2 8.6 8.6 5.1m/m % change, SA N.A. -1.4 1.1 3.4 -3.4 6.1 -4.9 13.0 -7.3 -25.5 35.1 -2.3 8.0 -2.6Real Manufacturing Sales (NSA, 2006=100) N.A. 126.6 123.0 118.9 117.0 116.5 111.1 123.8 99.6 95.6 115.6 113.8 117.4 115.1y/y % change, NSA N.A. 10.0 11.6 9.4 9.9 13.3 12.8 14.4 12.0 8.6 13.8 6.8 -3.7 -5.0m/m % change, SA N.A. 1.9 -0.5 3.6 -0.8 1.7 -5.0 4.1 3.9 -4.3 6.5 -2.3 1.5 2.0


Foreign TradeMerchandise Exports (NSA, Mil.US$) 18,381 18,833 19,236 17,673 17,094 17,703 15,161 15,727 12,197 11,305 14,463 12,653 14,082 13,863y/y % change 30.5 35.9 39.0 25.0 18.2 47.7 23.0 33.2 27.2 15.6 4.7 -14.2 -23.9 -30.712 mth accumulated 190,426 186,127 181,157 175,762 172,231 169,605 163,886 161,047 157,129 154,518 152,995 152,349 154,449 158,879Merchandise Imports (NSA, Mil.US$) 16,527 17,740 16,802 16,316 14,817 14,256 13,878 15,058 11,807 11,482 12,285 12,039 12,754 12,539y/y % change 29.6 41.5 55.9 45.3 50.2 52.5 60.9 49.8 50.9 11.4 6.8 -8.2 -25.8 -27.412 mth accumulated 173,007 169,234 164,033 158,006 152,919 147,964 143,056 137,805 132,800 128,818 127,647 126,863 127,943 132,373Merchandise Trade Balance (NSA, Mil.US$) 1,854 1,093 2,434 1,357 2,277 3,447 1,283 669 390 -177 2,178 614 1,328 1,32412 mth accumulated 17,419 16,893 17,124 17,756 19,312 21,641 20,830 23,242 24,329 25,700 25,348 25,486 26,506 26,507

PricesNational CPI [IPCA] (NSA, 12/93=100) 3,149.7 3,126.3 3,112.3 3,111.1 3,110.7 3,110.7 3,097.4 3,079.9 3,063.9 3,040.2 3,017.6 3,006.5 2,994.2 2,985.8y/y % change, NSA 5.20 4.70 4.49 4.60 4.84 5.22 5.26 5.17 4.83 4.59 4.31 4.22 4.17 4.34m/m % change, SA 0.74 0.44 0.01 -0.01 -0.01 0.42 0.57 0.52 0.77 0.73 0.36 0.42 0.28 0.24 Food & Beverages 1.85 1.03 -0.35 -0.85 -0.95 0.26 1.44 1.53 0.94 1.07 0.19 0.60 -0.08 -0.15 Dwellings 0.48 0.40 0.23 0.54 0.40 0.78 0.08 0.32 0.31 0.27 0.17 0.19 0.28 0.62 Housing Goods 0.37 0.46 -0.31 0.29 0.35 0.59 -0.04 1.00 0.36 0.41 0.51 0.43 0.38 -0.03 Dressing 0.89 0.45 0.17 -0.04 0.58 0.91 1.28 0.66 -0.53 0.31 0.76 0.58 0.64 0.57 Transport 0.36 0.13 -0.09 0.08 -0.21 0.09 -0.08 -0.54 0.79 1.45 0.78 0.61 0.51 0.27 Personal Care Products 0.26 0.36 0.26 0.31 0.57 0.74 0.84 0.27 0.23 0.36 0.24 0.24 0.29 0.30 Personal Services 0.64 0.34 0.20 0.54 0.74 0.75 0.66 0.77 0.40 0.78 0.46 0.55 0.20 0.52 Education 0.02 0.08 0.44 -0.03 0.03 0.04 0.11 0.54 4.53 0.26 0.10 0.01 0.04 0.07 Communications 0.29 0.04 -0.03 0.00 0.02 -0.01 -0.03 0.08 0.03 0.00 -0.11 0.01 0.91 0.22Core CPI (NSA,12/90=100) 4,754,340.1 4,733,512.7 4,716,063.3 4,710,410.8 4,699,132.8 4,682,276.6 4,656,201.9 4,636,727.7 4,617,334.9 4,586,149.0 4,559,249.5 4,538,373.0 4,521,642.9 4,510,816.9y/y % change 5.15 4.94 4.87 4.97 5.02 4.93 4.91 5.05 4.85 4.87 4.73 4.60 4.54 4.73m/m % change 0.44 0.37 0.12 0.24 0.36 0.56 0.42 0.42 0.68 0.59 0.46 0.37 0.24 0.31

Financial VariablesExchange Rate (EOP, Reais/US$) 1.70 1.69 1.76 1.76 1.80 1.82 1.73 1.78 1.81 1.87 1.74 1.75 1.74 1.78y/y % change -2.44 -4.72 -6.92 -6.17 -7.69 -7.93 -20.56 -23.08 -23.86 -19.06 -25.50 -24.98 -17.56 -7.12Selic - Target Rate (EOP, %) 10.75 10.75 10.75 10.75 10.25 9.50 9.50 8.75 8.75 8.75 8.75 8.75 8.75 8.75

Central BankForeign Reserves (EOP, NSA, Mil.US$) 284,930 275,206 261,320 257,299 253,114 249,846 247,316 243,953 241,289 240,823 239,054 238,000 232,920 224,213y/y % change 22.3 22.7 19.3 21.4 21.4 21.5 22.9 20.5 21.0 19.9 15.6 15.3 14.6 8.6m/m % change 3.5 5.3 1.6 1.7 1.3 1.0 1.4 1.1 0.2 0.7 0.4 2.2 3.9 2.4Monetary Base (EOP, NSA, Mil.Reais) N.A. 176,002 173,243 162,528 159,628 158,687 154,627 156,710 154,334 155,650 166,073 156,868 147,454 145,698y/y % change N.A. 20.8 26.4 19.9 14.7 19.0 6.8 16.0 13.3 13.2 12.6 18.6 11.1 6.4m/m % change N.A. 1.6 6.6 1.8 0.6 2.6 -1.3 1.5 -0.8 -6.3 5.9 6.4 1.2 6.3

Money and CreditM2 (EOP, NSA, Mil.Reais) N.A. 1,243,118 1,226,186 1,201,036 1,190,047 1,170,767 1,158,509 1,162,640 1,149,969 1,146,429 1,167,424 1,132,000 1,116,968 1,121,189y/y % change N.A. 10.9 11.0 9.3 8.7 8.9 9.1 9.9 8.5 8.7 8.8 9.4 10.2 13.4m/m % change N.A. 1.4 2.1 0.9 1.6 1.1 -0.4 1.1 0.3 -1.8 3.1 1.3 -0.4 1.5Total Credit to Private Sector (NSA, Mil.R$) N.A. 1,546,085 1,517,819 1,483,011 1,464,885 1,436,853 1,408,409 1,392,517 1,375,521 1,363,446 1,355,368 1,331,546 1,312,078 1,293,668y/y % change N.A. 19.5 19.4 18.4 17.3 16.5 15.4 14.6 14.5 13.5 12.9 12.5 12.8 14.3m/m % change N.A. 1.9 2.3 1.2 2.0 2.0 1.1 1.2 0.9 0.6 1.8 1.5 1.4 1.7

Fiscal accountsTotal Revenue (NSA, Mil.R$) N.A. 139,225 69,809 68,561 61,462 65,495 78,570 62,550 57,107 73,899 79,648 74,240 69,410 53,503y/y % change N.A. 160.2 14.8 13.7 11.7 16.3 24.9 11.9 18.1 17.6 14.9 34.3 5.5 -10.8Total Expenditure (NSA, Mil.R$) N.A. 103,288 53,801 59,221 49,817 52,053 50,366 58,091 45,340 49,382 63,831 51,401 47,229 53,206y/y % change N.A. 94.1 13.6 16.1 16.6 18.7 15.8 41.3 17.7 2.0 5.4 13.1 15.9 20.0Central Government Nominal Result (NSA, Mil.R$) N.A. N.A. -9,131 -12,596 -6,413 -12,306 7,055 -14,611 -8,852 1,780 -9,959 -2,272 -114 -22,35612 mth accumulated N.A. N.A. -89,775 -89,937 -90,465 -95,855 -95,013 -105,156 -97,926 -96,039 -107,363 -132,466 -138,361 -127,260Central Government Primary Result (NSA, Mil.R$) N.A. 26,057 4,000 775 665 -511 16,597 -4,556 -1,186 13,866 1,921 10,663 11,235 -7,81412 mth accumulated N.A. 79,525 45,655 45,038 45,772 44,489 44,633 38,067 49,250 49,325 39,436 17,521 2,439 6,072



UBS 33

Chile Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsIndicator of Economic Activity, IMACEC (NSA, 2003=100) N.A. 129.05 131.38 132.90 132.61 135.56 134.67 130.17 118.80 126.07 132.77 126.54 126.18 121.19y/y % change, NSA N.A. 6.49 7.63 7.11 6.85 7.35 5.44 -2.33 3.42 3.90 3.69 3.45 -0.93 -1.20m/m % change, SA N.A. 0.36 -0.20 1.29 0.68 1.06 8.62 -6.83 -0.66 0.82 0.37 1.42 0.73 -0.12Industrial Production (NSA, 2003=100) N.A. 104.70 110.90 108.60 102.40 102.90 98.70 93.30 101.80 105.90 110.00 107.90 109.70 101.90y/y % change, NSA N.A. 2.75 6.43 2.07 1.09 2.69 -6.36 -18.80 -0.20 1.15 1.48 1.31 -5.51 -6.34m/m % change, SA N.A. -2.68 2.56 5.30 -1.80 7.65 18.34 -22.74 -1.20 0.74 -0.74 1.21 0.47 0.00

Business cycle indicators and surveysIMACEC Expectations for Previous Month (%) 7.00 6.70 6.00 5.60 4.50 0.10 -1.20 4.30 3.50 3.00 2.00 0.30 -0.10 -1.20Quarterly GDP Expectations in Quarter of Survey (%) 6.20 6.90 6.10 5.90 4.50 3.00 3.00 2.90 4.50 4.00 1.50 2.10 2.00 -1.40Monthly Inflation Expectations (%) 0.20 0.40 0.40 0.50 0.30 0.40 0.70 0.80 0.10 -0.10 -0.20 0.00 0.20 0.40Monetary Policy Rate Expectations (EOP, %) 2.75 2.50 2.00 1.50 0.75 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50Expectations for Exchange Rate (EOP, Pesos/US$) 490 500 515 530 530 520 510 510 529 500 500 525 549 548

ConsumptionReal Retail Sales (NSA, 2005=100) N.A. 139.50 134.90 137.90 133.10 143.80 137.90 132.50 116.20 123.20 170.00 123.90 123.30 118.50y/y % change N.A. 17.72 13.08 18.47 17.79 19.14 22.36 11.91 7.99 6.67 9.68 5.27 2.66 1.37m/m % change N.A. 3.41 -2.18 3.61 -7.44 4.28 4.08 14.03 -5.68 -27.53 37.21 0.49 4.05 -0.67

Foreign TradeMerchandise Exports, fob (NSA, Mil.US$) 5,281.3 6,502.3 5,397.2 5,792.0 5,201.4 5,268.6 5,351.3 5,322.7 4,751.9 5,899.9 5,569.8 4,973.1 4,746.8 4,860.9y/y % change 11.3 33.8 24.7 19.2 18.1 27.9 21.9 28.4 38.3 51.3 56.1 30.1 0.1 12.712 mth accumulated 65,311.5 64,777.0 63,135.6 62,067.1 61,135.5 60,338.2 59,190.2 58,228.4 57,051.8 55,734.9 53,735.5 51,734.5 50,585.0 50,578.9Merchandise Imports, fob (NSA, Mil.US$) 5,066.4 4,717.5 4,867.2 4,776.1 4,243.9 4,740.2 4,236.3 4,212.3 3,565.7 3,884.0 3,889.9 3,831.3 3,821.4 3,267.0y/y % change 32.6 44.4 48.9 27.1 40.4 69.3 30.9 43.0 26.3 25.7 2.7 4.7 -28.8 -38.812 mth accumulated 52,030.8 50,785.8 49,335.3 47,736.4 46,718.0 45,497.3 43,556.8 42,556.3 41,289.2 40,547.7 39,753.9 39,653.4 39,480.6 41,024.5Trade Balance (NSA, Mil.US$) 214.9 1,784.8 530.0 1,015.9 957.5 528.4 1,115.0 1,110.3 1,186.2 2,015.9 1,679.9 1,141.8 925.4 1,593.912 mth accumulated 13,280.6 13,991.1 13,800.2 14,330.6 14,417.3 14,840.6 15,633.1 15,671.8 15,762.5 15,187.1 13,981.5 12,081.0 11,104.3 9,554.3

PricesConsumer Price Index (NSA, 2009=100) 102.28 102.18 101.77 101.87 101.22 101.22 100.86 100.39 100.31 100.03 99.51 99.92 100.29 100.30y/y % change, NSA 1.98 1.87 2.62 2.25 1.16 1.50 0.92 0.30 0.43 -1.32 -1.48 -2.27 -2.03 -1.16m/m % change, SA 0.32 -0.03 -0.43 0.35 -0.58 0.37 0.36 -0.11 0.62 1.13 0.03 -0.06 0.20 0.71 Food and Nonalcoholic Beverages 0.00 0.56 0.49 0.34 -0.35 0.23 0.07 0.86 1.00 0.30 0.95 -0.48 0.27 0.06 Alcoholic Beverages and Tobacco -0.41 -0.41 0.15 0.37 7.08 0.71 0.17 0.45 0.52 1.13 0.14 -0.02 0.03 -0.58 Clothing and Footwear -2.00 -1.28 -0.34 -6.33 -2.40 -1.86 -1.25 -0.90 0.56 -4.43 -1.93 -1.60 -1.26 0.97 Housing, Water, Electricity, Gas and Other Fuels 0.55 -0.38 1.91 -0.16 -0.73 1.02 0.48 1.37 -0.75 0.37 0.60 -0.79 -0.07 3.88 Household Furnishings, Maint & Articles for the Home -0.14 -0.09 0.53 0.43 -0.04 0.93 0.10 -0.11 -0.59 -0.36 -0.51 -0.54 -0.15 -0.17 Health 0.52 0.56 0.34 -1.27 -0.32 -0.11 0.55 -0.15 0.60 -0.44 0.42 0.43 0.74 0.52 Transportation 1.76 0.04 -0.94 0.36 -2.03 0.64 1.41 -0.66 2.16 1.55 -0.24 1.13 0.99 1.43 Communication -0.09 -0.50 -0.96 -0.72 -0.67 -1.69 0.15 0.84 0.18 0.81 -0.70 -1.35 0.01 -0.42 Recreation and Culture -1.40 -0.95 -1.08 -0.60 -0.29 0.05 -0.47 -1.09 0.65 0.26 -0.93 -0.33 -0.99 -1.33 Education 0.42 0.58 0.54 0.54 0.64 0.39 -0.26 -1.54 0.58 0.09 0.84 0.56 0.41 0.50 Hotels and Restaurants 0.35 0.35 0.02 0.01 -0.36 0.73 0.62 0.17 0.96 0.82 0.39 0.01 0.03 0.04 Miscellaneous Goods and Services -0.76 0.08 -6.69 7.93 -0.60 0.57 0.31 0.31 0.64 15.04 -0.39 -0.74 -0.55 -0.46Core CPI (NSA, 2009=100) 101.19 101.27 100.83 100.96 100.36 100.10 99.89 99.67 99.61 99.51 98.94 99.17 99.71 99.73y/y % change, NSA 1.48 1.54 1.90 1.41 0.06 -0.15 -0.65 -1.00 -0.82 -2.20 -1.89 -1.57 -0.44 0.18m/m % change, SA 0.12 0.13 -0.25 0.40 0.25 0.32 0.29 -0.16 0.25 0.88 -0.39 -0.35 0.17 0.49

Financial VariablesExchange Rate (EOP, Pesos/US$) 491.76 485.23 499.26 522.36 543.09 529.23 520.99 526.29 529.69 531.75 506.43 495.84 531.74 546.07y/y % change -7.52 -11.14 -9.33 -3.61 2.65 -6.27 -11.49 -9.59 -11.09 -13.17 -19.50 -24.81 -20.03 -1.16Monetary Policy Rate (EOP, %) 2.75 2.50 2.00 1.50 1.00 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

Central BankIntl Reserves of the BCdC (EOP, Mil.US$) 26,472.8 26,445.5 25,221.3 25,826.4 25,175.5 24,860.8 25,523.3 25,631.0 24,921.7 24,945.7 25,372.5 26,114.6 25,963.5 26,040.3y/y % change 2.0 1.6 0.7 9.9 7.4 3.6 8.3 9.6 8.8 6.4 9.5 19.1 13.1 7.6m/m % change 0.1 4.9 -2.3 2.6 1.3 -2.6 -0.4 2.8 -0.1 -1.7 -2.8 0.6 -0.3 3.9Monetary Base (NSA, Bil.Pesos) 5,293.4 5,230.0 5,211.8 5,172.6 5,258.3 5,140.5 4,965.6 5,066.0 4,952.2 4,802.9 4,735.2 4,558.9 4,379.1 4,558.8y/y % change 20.9 14.7 16.1 20.1 18.7 18.3 17.3 20.1 18.9 11.5 10.4 10.2 11.2 15.5m/m % change 1.2 0.3 0.8 -1.6 2.3 3.5 -2.0 2.3 3.1 1.4 3.9 4.1 -3.9 1.6

Money and CreditM2 (NSA, Bil.Pesos) 56,012 54,586 54,067 54,329 54,835 54,841 53,971 53,353 52,896 52,900 51,716 51,272 51,360 52,233y/y % change 9.1 4.5 4.1 4.5 6.5 7.6 6.1 3.3 -2.6 -3.3 -5.3 -4.2 -2.6 2.8m/m % change 2.6 1.0 -0.5 -0.9 0.0 1.6 1.2 0.9 0.0 2.3 0.9 -0.2 -1.7 0.5Total loans to private sector (EOP, Bil. Pesos) N.A. N.A. 66,045 65,561 65,074 64,637 63,917 63,076 63,094 63,321 63,363 68,635 68,617 68,541y/y % change N.A. N.A. -3.2 -3.5 -3.7 -5.2 -6.9 -8.1 -9.2 -10.0 -10.5 -3.4 -2.1 1.6m/m % change N.A. N.A. 0.7 0.7 0.7 1.1 1.3 0.0 -0.4 -0.1 -7.7 0.0 0.1 0.5

Fiscal accountsCen Gov Total Revenue (NSA, Mil.Pesos) N.A. 1,939,509 1,682,396 1,702,927 2,511,350 1,030,120 2,956,578 1,892,492 1,533,103 1,740,489 2,390,234 1,466,559 1,594,154 1,615,137y/y % change N.A. 20.1 44.9 13.5 94.6 518.9 37.0 47.4 7.1 6.9 -1.0 -6.9 0.4 -8.4Cen Gov Total Expenditure (NSA, Mil.Pesos) N.A. 1,980,046 1,797,688 1,762,165 1,962,179 1,757,034 1,911,473 1,989,577 1,557,811 1,670,064 2,599,783 1,790,997 1,710,341 1,901,014y/y % change N.A. 4.2 0.1 0.2 5.4 0.3 11.7 1.7 5.4 7.3 11.3 17.9 1.0 21.6Cen Gov Budget balance N.A. -40,538 -115,293 -59,238 549,171 -726,914 1,045,106 -97,085 -24,709 70,425 -209,549 -324,438 -116,188 -285,87612 mth accumulated N.A. -49,250 -294,588 -813,918 -1,014,149 -2,133,460 -2,991,826 -3,591,208 -4,167,346 -4,189,178 -4,186,859 -3,898,330 -3,518,115 -3,506,793



UBS 34

Colombia Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsReal Industrial Production (NSA, 2001=100) N.A. N.A. 132.8 130.1 130.8 133.2 127.7 135.3 124.9 116.3 131.6 133.4 135.2 134.2

y/y % change, NSA N.A. N.A. 4.6 0.2 8.2 7.5 7.4 5.8 2.6 0.1 1.4 1.1 -4.2 -4.8

m/m % change, SA N.A. N.A. 0.7 -4.7 0.0 -1.7 3.3 1.0 2.7 -1.9 2.7 0.4 -0.9 3.2

ConsumptionReal Retail Trade ex-fuel (NSA, 1999=100) N.A. N.A. 172.6 174.8 168.5 166.3 146.0 160.9 144.4 154.4 242.0 160.5 154.6 144.4

y/y % change N.A. N.A. 13.1 14.1 14.6 12.5 7.3 10.7 4.8 7.2 3.3 1.8 -0.2 -7.0

m/m % change, SA N.A. N.A. -1.3 3.7 1.4 13.9 -9.3 11.5 -6.5 -36.2 50.8 3.8 7.1 -5.4

Real Manufacturing Sales (NSA, 2001=100) N.A. N.A. 130.3 125.9 130.9 129.7 127.7 135.1 124.4 115.2 139.1 133.3 135.2 130.8

y/y % change, NSA N.A. N.A. 4.1 -2.0 6.6 3.8 5.8 5.6 0.3 1.6 1.2 -0.8 -5.9 -9.0

m/m % change, SA N.A. N.A. 1.9 -6.4 1.8 -4.0 2.6 3.8 -1.0 0.1 3.7 -0.9 -0.3 3.5

Foreign TradeExports of Goods, fob (NSA, Mil.US$) N.A. 3216.2 3270.8 3154.9 3058.0 3565.3 3491.0 3345.2 2876.4 2913.4 3189.6 2861.3 2948.7 2796.0

y/y % change N.A. 15.0 22.3 8.8 11.7 30.0 43.8 23.4 22.9 15.4 7.6 26.0 -5.5 -10.7

12 mth accumulated N.A. 37890.8 37470.6 36873.3 36617.0 36297.1 35474.3 34410.9 33777.0 33240.7 32853.0 32626.7 32036.4 32206.6

Imports of Goods, cif (NSA, Mil.US$) N.A. N.A. 3606.3 3438.0 3120.4 3183.6 3182.2 3320.4 2793.4 2696.9 3061.2 2826.5 2967.0 2748.8

y/y % change N.A. N.A. 41.9 8.2 25.5 30.1 19.3 24.7 10.5 -3.1 -0.1 -14.2 -20.4 -27.6

12 mth accumulated N.A. N.A. 36944.7 35880.2 35620.5 34986.1 34250.1 33735.4 33077.2 32811.0 32897.5 32901.8 33370.7 34131.7

Trade Balance, fob-cif (NSA, Mil.US$) N.A. N.A. -335.5 -283.1 -62.4 381.7 308.8 24.8 83.0 216.5 128.4 34.8 -18.3 47.2

12 mth accumulated N.A. N.A. 525.9 993.1 996.5 1311.0 1224.2 675.5 699.8 429.7 -44.5 -275.1 -1334.3 -1925.1

PricesConsumer Price Index (NSA, 12/08=100) 104.36 104.45 104.59 104.47 104.52 104.40 104.29 103.81 103.55 102.70 102.00 101.92 101.98 102.12

y/y % change, NSA 2.33 2.28 2.31 2.24 2.25 2.07 1.99 1.83 2.09 2.10 2.00 2.37 2.72 3.21

m/m % change, SA 0.37 0.21 0.45 0.06 0.25 0.18 0.16 -0.15 0.17 0.35 0.15 0.11 0.32 0.23

Food 0.49 0.23 0.81 -0.12 0.19 -0.09 0.21 -0.27 0.34 -0.03 -0.01 -0.04 0.49 0.29

Housing 0.29 0.06 0.34 0.23 0.46 0.29 0.19 0.09 0.45 0.52 0.35 0.30 0.21 0.15

Apparel -0.13 -0.20 -0.10 0.04 -0.32 -0.20 -0.08 -0.19 -0.23 -0.02 -0.07 -0.03 0.00 -0.08

Health 0.30 0.25 0.47 0.37 0.43 0.48 0.31 0.23 -0.04 0.75 0.27 0.29 0.31 0.37

Education 0.50 0.24 0.49 0.49 0.46 0.47 0.48 -0.24 -0.02 0.15 0.45 0.49 0.50 0.32

Entertainment 0.72 0.05 0.27 0.36 -0.31 0.06 -0.22 -0.48 -0.12 0.05 -0.26 -0.77 0.24 0.19

Transport 0.05 0.30 -0.07 -0.17 0.18 0.41 0.32 -0.34 0.37 1.15 0.17 0.09 -0.07 0.08

Communications 0.05 0.38 0.44 -0.10 0.12 0.06 -0.77 -2.12 0.61 0.16 -0.91 0.16 0.08 0.30

Other Expenses 0.16 0.53 0.51 0.29 0.35 0.42 0.14 0.09 -0.10 0.29 0.29 0.12 0.28 0.44

Financial VariablesExchange Rate (EOP, Peso/US$) 1,831.6 1,799.9 1,823.7 1,842.8 1,916.5 1,971.6 1,969.8 1,928.6 1,932.3 1,982.3 2,044.2 1,997.5 1,993.8 1,922.0

y/y % change -8.1 -6.4 -10.4 -9.8 -11.2 -7.9 -14.0 -24.7 -24.4 -18.1 -8.9 -13.8 -15.5 -11.6

BDLR Intervention Rate (EOP, %) N.A. 3.0 3.0 3.0 3.0 3.0 3.0 3.5 3.5 3.5 3.5 3.5 4.0 4.0

Central BankGross Foreign Reserves (NSA, Mil.US$) 27,464.6 26,911.0 26,326.5 26,290.1 26,026.2 25,557.0 25,532.6 25,140.5 24,842.7 24,896.8 24,992.2 25,075.1 24,820.3 24,756.4

y/y % change 10.7 8.7 5.8 10.7 11.4 10.1 10.8 7.1 8.1 7.1 5.6 7.9 7.7 4.3

m/m % change 2.1 2.2 0.1 1.0 1.8 0.1 1.6 1.2 -0.2 -0.4 -0.3 1.0 0.3 -0.5

Money and CreditM3 of Private Sector (Bil.Pesos) N.A. 176,643.9 164,580.7 175,941.6 166,399.7 162,373.1 162,069.6 163,888.1 170,921.2 163,568.1 160,689.1 156,897.6 153,603.1 150,462.2

y/y % change N.A. 17.4 8.1 14.8 9.3 8.3 8.8 8.5 12.7 9.9 6.0 10.7 10.4 10.9

m/m % change N.A. 7.3 -6.5 5.7 2.5 0.2 -1.1 -4.1 4.5 1.8 2.4 2.1 2.1 -1.2

Gross Domestic Credit to Private Sector (Bil.Pesos) N.A. 145,688.4 141,743.6 139,613.8 137,990.6 135,550.0 133,901.3 134,083.0 133,766.8 132,738.4 131,035.7 131,413.2 130,095.5 129,730.8

y/y % change N.A. 12.3 9.2 6.0 4.4 2.0 1.1 1.4 0.9 0.3 -0.4 -1.0 -0.2 1.8

m/m % change N.A. 2.8 1.5 1.2 1.8 1.2 -0.1 0.2 0.8 1.3 -0.3 1.0 0.3 -0.1

Fiscal accountsCentral Government Revenue (NSA, Bil.Pesos) N.A. 7,007.9 6,579.2 6,071.6 5,637.5 6,502.3 7,461.6 5,688.7 5,697.3 8,126.2 6,686.8 5,473.1 4,028.7 6,458.9

y/y % change N.A. 8.5 -24.6 11.4 -15.3 7.7 -27.5 9.6 3.4 9.1 10.3 -1.5 -28.7 -3.5

Central Government Expenditure (NSA, Bil.Pesos) N.A. 6,918.7 6,785.1 8,001.0 9,092.0 8,113.8 7,095.0 7,012.9 8,003.6 6,901.2 9,494.6 9,310.8 7,746.8 7,589.3

y/y % change N.A. -8.8 -20.3 -3.9 3.9 2.4 -3.2 6.3 -18.9 27.3 -1.3 19.2 9.2 9.9

Central Government Interest Payments (NSA, Bil.Pesos) N.A. 1,373.0 970.2 2,450.2 1,022.6 2,212.8 905.2 525.2 1,511.3 505.5 185.1 1,659.6 1,501.7 1,591.7

y/y % change N.A. -13.7 -7.6 1.9 34.9 -4.3 117.9 17.8 -17.1 -11.4 -40.7 22.6 -5.3 2.3

Central Government Surplus/Deficit {-} (NSA, Bil.Pesos) N.A. 89.3 -205.8 -1,929.4 -3,454.4 -1,611.5 366.7 -1,324.1 -2,306.2 1,225.0 -2,807.8 -3,837.7 -3,718.1 -1,130.4

12 mth accumulated N.A. -19,514.0 -20,733.7 -20,315.3 -21,261.9 -19,900.6 -20,177.2 -17,583.6 -17,664.7 -19,711.5 -18,909.6 -19,657.3 -18,070.2 -15,794.9



UBS 35

Mexico Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsIndicator of Global Economic Activity (NSA, 2003=100) N.A. N.A. 119.4 118.9 118.4 116.5 113.6 116.3 106.7 108.6 117.0 116.1 115.9 110.6y/y % change, NSA N.A. N.A. 7.2 5.0 6.9 8.9 7.4 6.9 3.8 2.5 0.5 -1.7 -5.5 -5.4m/m % change, SA N.A. N.A. 0.6 0.6 -0.3 0.1 1.0 1.0 1.4 -1.4 0.3 2.0 0.4 0.8Industrial Production (NSA, 2003=100) N.A. 113.4 115.6 113.5 115.1 114.2 110.2 115.1 103.8 107.0 108.3 108.9 113.5 106.7y/y % change, NSA N.A. 6.3 7.6 4.8 8.4 8.5 6.7 7.6 4.5 3.4 0.9 -2.1 -6.0 -5.6m/m % change, SA N.A. -0.1 0.4 0.4 -0.4 0.3 0.2 1.3 1.0 0.0 1.1 0.6 1.6 0.9Total Vehicle Production (NSA, Units) 220,708 197,418 205,740 180,083 206,195 178,738 170,277 190,091 167,292 165,058 153,950 176,655 184,769 146,295y/y % change 19.5 34.9 53.0 65.4 102.0 65.3 69.6 85.1 55.6 102.4 25.4 2.9 -13.9 -22.7m/m % change 11.8 -4.0 14.2 -12.7 15.4 5.0 -10.4 13.6 1.4 7.2 -12.9 -4.4 26.3 8.8

Business cycle indicators and surveysConsumer Confidence (NSA, 01/03=100) 89.2 91.6 88.7 87.4 87.5 84.6 82.5 81.8 80.6 82.1 80.1 78.2 77.0 81.9y/y % change 15.8 11.8 8.8 2.3 8.0 8.0 0.5 3.0 2.2 0.2 -4.8 -6.8 -6.1 -7.6m/m % change -2.6 3.3 1.5 -0.1 3.4 2.5 0.9 1.5 -1.8 2.5 2.4 1.6 -6.0 0.5

ConsumptionRetail Sales (NSA, 2003=100) N.A. N.A. 118.2 117.4 112.6 115.8 108.6 115.2 105.7 114.2 146.8 116.0 112.7 107.2y/y % change, NSA N.A. N.A. 4.4 1.9 1.4 5.0 -0.1 2.3 2.2 -1.8 1.6 -1.5 -4.6 -4.5m/m % change, SA N.A. N.A. 0.7 0.7 -0.8 0.6 -0.6 0.7 1.0 -0.3 0.2 2.1 -0.3 0.1

InvestmentGross Fixed Capital Formation (NSA, 2003=100) N.A. N.A. 134.0 132.7 130.9 130.5 122.3 133.5 116.4 122.8 136.9 127.4 134.6 125.4y/y % change, NSA N.A. N.A. 4.8 0.4 0.7 6.2 0.9 2.9 -2.1 -4.4 -4.1 -7.3 -12.6 -10.4m/m % change, SA N.A. N.A. 1.4 1.2 -1.9 1.0 -0.6 0.7 -0.2 0.8 0.9 1.2 -0.5 -0.4Capacity Utilization: Total (%) N.A. N.A. 80.0 79.3 80.1 79.9 79.6 80.7 78.8 78.9 78.6 78.6 80.0 79.2

Foreign TradeExports, fob (NSA, Mil.US$) N.A. 25,301.4 26,915.9 23,328.1 24,996.4 24,802.9 24,866.2 26,104.0 21,302.6 19,189.9 23,103.5 22,364.0 22,117.6 20,939.1y/y % change N.A. 20.8 37.6 29.5 28.8 43.9 43.1 41.0 32.6 27.2 23.7 10.3 -9.5 -16.512 mth accumulated N.A. 284,392.5 280,030.2 272,679.8 267,367.9 261,773.2 254,208.6 246,714.6 239,128.7 233,890.9 229,783.0 225,363.3 223,274.9 225,586.7Imports, fob (NSA, Mil.US$) N.A. 25,861.5 27,615.1 24,364.5 25,336.9 24,624.0 24,764.0 25,710.9 20,879.8 19,634.1 23,184.5 22,493.5 21,880.8 21,818.1y/y % change N.A. 18.5 36.5 26.5 29.5 46.7 43.9 38.6 25.7 16.9 11.7 -3.2 -21.1 -22.112 mth accumulated N.A. 286,349.6 282,306.2 274,925.2 269,815.5 264,048.6 256,213.2 248,652.8 241,496.4 237,229.9 234,384.9 231,953.0 232,694.3 238,535.2Balance of Trade, fob (Mil.US$) N.A. -560.0 -699.2 -1,036.4 -340.5 178.9 102.2 393.1 422.8 -444.2 -81.1 -129.4 236.8 -879.012 mth accumulated N.A. -1,957.0 -2,276.0 -2,245.4 -2,447.6 -2,275.4 -2,004.6 -1,938.3 -2,367.8 -3,339.1 -4,602.0 -6,589.8 -9,419.7 -12,948.8

PricesConsumer Price Index (NSA, Jun 16-30, 2002=100) 142.78 141.91 141.17 140.78 140.47 140.51 141.41 141.86 140.86 140.05 138.54 137.97 137.26 136.84y/y % change, NSA 4.02 3.70 3.68 3.64 3.69 3.92 4.27 4.97 4.83 4.46 3.57 3.86 4.50 4.89m/m % change, SA 0.48 0.24 0.24 0.20 0.13 0.06 -0.12 0.63 0.64 1.17 0.23 0.06 0.17 0.21 Food, Beverages & Tobacco 1.18 -0.10 0.42 0.02 -0.26 -0.47 -1.01 1.23 1.45 1.64 -0.27 -0.55 -0.24 0.19 Clothes, Shoes & Accessories 0.32 0.46 0.40 -0.03 0.29 0.25 0.44 0.37 0.19 0.17 0.20 0.25 0.17 0.59 Housing 0.08 0.34 0.26 0.10 0.09 0.05 -0.22 0.27 0.72 0.84 0.33 0.25 0.42 0.11 Furniture, Appliances & Home Furnishing 0.57 0.37 0.13 0.17 -0.03 0.10 0.07 -0.03 0.28 0.68 0.01 0.05 -0.03 0.15 Medical Care 0.48 0.49 0.42 0.26 0.15 0.35 0.26 0.27 0.29 0.97 0.07 0.17 0.27 0.23 Transportation 0.41 0.33 -0.13 0.50 0.76 0.55 0.55 0.59 0.62 1.56 0.60 0.56 0.58 0.25 Personal & Educational Expenses 0.47 0.08 -0.02 0.45 0.45 0.40 0.03 0.55 0.27 0.62 0.67 0.29 0.46 -0.06 Other Goods & Services 0.30 0.26 0.35 0.34 0.23 0.49 0.50 0.19 0.47 0.84 0.46 0.19 0.28 0.37Consumer Price Index: Core (NSA, 2002=100) 140.02 139.67 139.14 139.00 138.73 138.55 138.21 138.06 137.56 137.02 136.13 135.45 135.18 134.79y/y % change, NSA 3.58 3.62 3.68 3.79 3.94 4.10 4.11 4.40 4.60 4.70 4.46 4.59 4.90 4.92m/m % change, SA 0.29 0.23 0.18 0.23 0.19 0.32 0.15 0.29 0.32 0.66 0.38 0.28 0.32 0.28

Financial VariablesExchange Rate (EOP, NewPeso/US$) 12.5 12.5 13.0 12.7 12.7 12.9 12.4 12.5 12.9 12.9 13.1 12.9 13.3 13.5y/y % change -6.1 -7.4 -1.7 -4.4 -4.1 -2.1 -10.8 -13.0 -13.9 -8.6 -3.5 -2.0 2.9 25.1Target Rate (EOP, %) 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5

Central BankInternational Reserves (NSA, Mil.US$) 110,658 108,312 106,862 104,865 101,365 98,022 97,402 95,682 94,470 92,555 90,838 81,933 79,779 76,122y/y % change 38.7 42.3 39.9 43.1 36.6 29.6 26.7 21.3 18.0 10.7 6.3 -1.8 3.4 -8.6m/m % change 2.2 1.4 1.9 3.5 3.4 0.6 1.8 1.3 2.1 1.9 10.9 2.7 4.8 -0.3Monetary Base (NSA, Mil.NewPesos) N.A. 589,263 584,119 593,183 577,816 582,624 574,363 597,194 584,172 600,422 632,032 547,653 534,521 524,786y/y % change N.A. 12.3 10.3 9.6 8.7 8.6 6.9 11.9 8.3 8.6 9.4 8.4 11.9 14.4m/m % change N.A. 0.9 -1.5 2.7 -0.8 1.4 -3.8 2.2 -2.7 -5.0 15.4 2.5 1.9 -0.9

Money and CreditMoney Supply, M2 (Mil.New Pesos) N.A. 7,185,819 7,140,295 7,037,521 6,910,379 6,798,142 6,691,138 6,658,537 6,574,889 6,594,048 6,522,612 6,573,420 6,627,711 6,554,617y/y % change N.A. 9.6 9.9 8.5 8.0 6.8 5.1 5.5 4.4 4.6 6.2 13.1 14.1 13.9m/m % change N.A. 0.6 1.5 1.8 1.7 1.6 0.5 1.3 -0.3 1.1 -0.8 -0.8 1.1 0.9

Fiscal accountsGovt Consolidated Budgetary Revenue (Yr-to-Date, Mil.NewPesos) N.A. 2,096,974 1,859,618 1,627,203 1,409,271 1,177,060 962,541 735,734 498,132 270,333 2,817,186 2,423,515 2,206,453 2,011,364y/y % change N.A. 4.3 3.4 5.2 5.2 5.0 2.3 13.3 13.4 22.8 -1.5 -6.5 -6.4 -3.0Govt Consolidated Budgetary Expenditures(Yr-to-Date, Mil.NewPesos) N.A. 2,281,380 2,012,997 1,792,341 1,521,532 1,183,573 956,462 733,160 473,381 261,972 3,088,877 2,646,700 2,388,850 2,143,604y/y % change N.A. 6.4 5.7 5.4 5.4 4.8 4.6 5.2 5.8 7.2 7.5 12.2 11.3 10.6Govt Economic Balance (Yr-to-Date, Mil.NewPesos) N.A. -176,796 -140,267 -151,617 -101,711 -3,835 8,543 11,321 22,906 6,370 -273,486 -218,118 -179,597 -122,090Govt Economic Primary Balance (Yr-to-Date, Mil.NewPesos) N.A. -12,074 8,559 -10,083 29,157 58,070 61,487 44,431 53,162 26,743 -7,692 -27,442 8,910 54,786



UBS 36

Peru Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsGross Domestic Product Index (NSA, 1994=100) N.A. N.A. 208.5 214.9 221.7 227.7 216.7 207.8 193.6 195.1 207.0 197.9 198.7 192.0

y/y % change, NSA N.A. N.A. 9.2 9.0 11.9 9.1 9.3 8.9 5.7 3.7 4.9 3.5 1.3 0.1

m/m % change, SA N.A. N.A. 0.2 -0.4 1.1 0.7 0.1 2.7 0.8 -0.2 1.0 -0.1 1.5 0.4

Industrial Production Index (NSA, 1994=100) N.A. N.A. 211.0 206.8 214.6 213.8 201.2 207.5 185.4 189.5 198.4 195.4 191.0 185.2

y/y % change, NSA N.A. N.A. 19.0 17.2 21.6 13.9 16.4 15.1 7.2 0.3 1.6 -2.6 -6.5 -8.8

m/m % change, SA N.A. N.A. 0.7 0.2 0.7 2.9 -1.5 4.1 2.5 0.1 2.6 0.9 1.5 1.3

Foreign TradeMerchandise Exports, fob (NSA, Mil.US$) N.A. N.A. 2,952 2,964 3,092 2,390 2,644 2,829 2,634 2,442 2,942 2,693 2,524 2,493

y/y % change N.A. N.A. 27.2 25.9 40.7 11.1 45.8 44.9 45.4 49.6 51.0 29.3 3.3 -9.4

12 mth accumulated N.A. N.A. 32,599 31,968 31,359 30,464 30,225 29,394 28,517 27,695 26,885 25,891 25,281 25,200

Merchandise Imports, fob (NSA, Mil.US$) N.A. N.A. 2,582 2,519 2,289 2,096 2,224 2,387 1,873 2,074 2,006 2,015 1,951 1,843

y/y % change N.A. N.A. 48.6 44.0 37.3 41.0 32.9 52.0 21.5 17.0 5.0 -1.0 -27.8 -32.9


Trade Balance, fob-cif (NSA, Mil.US$) N.A. N.A. 370 445 804 293 421 442 761 368 936 678 574 650


PricesConsumer Price Index (NSA, 2009=100) 101.99 102.14 102.17 101.90 101.53 101.27 101.03 101.01 100.73 100.40 100.11 99.79 99.90 99.78

y/y % change, NSA 2.10 2.37 2.31 1.82 1.64 1.04 0.76 0.76 0.84 0.44 0.25 0.29 0.71 1.20

m/m % change, SA -0.18 -0.12 0.33 0.37 0.23 0.24 0.10 0.10 0.27 0.32 0.27 0.13 0.08 -0.16

Food and Beverages -0.67 -0.13 0.70 0.49 0.57 0.38 -0.15 0.32 0.68 1.14 0.20 -0.30 0.36 -0.22

Clothing and Footwear 0.46 0.04 0.08 0.17 0.16 0.25 0.16 0.11 0.13 0.23 0.31 0.23 0.05 -0.03

Rent, Fuel and Electricity 0.29 0.25 -0.21 0.66 0.13 -0.15 0.12 0.04 0.67 -0.77 0.28 0.00 -0.70 0.11

Furnitures, Equipment & Maintenance 0.13 0.27 0.02 0.01 0.04 -0.15 0.05 0.01 0.01 -0.45 -0.09 0.03 0.04 0.05

Health 0.36 0.33 0.00 0.01 0.08 0.44 0.15 0.26 0.06 -0.12 -0.18 0.22 0.11 0.26

Transportation and Communication 0.21 -0.46 -0.10 0.58 -0.03 0.51 -0.18 -0.18 -0.04 -0.55 1.39 -0.02 -0.09 -0.22

Entertainment 0.04 0.28 0.23 0.03 0.05 -0.03 0.54 0.99 0.03 -0.34 0.06 0.05 0.02 0.19

Other Goods & Services 0.13 -0.04 -0.05 0.14 0.09 0.08 0.05 0.28 -0.11 -0.33 0.12 0.11 0.13 0.23

Core CPI (NSA, 2009=100) 102.14 101.97 101.83 101.59 101.51 101.38 101.24 101.01 100.68 100.51 100.30 100.23 100.07 100.09

y/y % change 2.07 1.88 1.90 1.78 1.78 1.82 1.84 1.77 1.91 2.21 2.35 2.68 3.12 3.73

m/m % change 0.17 0.14 0.24 0.08 0.13 0.14 0.23 0.33 0.17 0.21 0.07 0.16 -0.02 0.16

Financial VariablesExchange Rate (EOP, PEN/US$) N.A. 2.79 2.80 2.82 2.83 2.84 2.85 2.84 2.85 2.86 2.89 2.88 2.90 2.89

y/y % change N.A. -3.40 -5.09 -5.46 -6.05 -4.98 -4.78 -10.07 -12.38 -10.05 -8.00 -6.92 -5.90 -2.99

Reference Rate (EOP, %) 3.00 3.00 2.50 2.00 1.75 1.50 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25

Central BankTotal International Assets (EOP, NSA, Mil.US$) 43,002 42,503 40,243 38,675 35,382 34,647 35,092 35,306 35,046 34,379 33,176 33,464 32,957 32,163

y/y % change 30.5 32.1 25.8 20.4 14.8 11.0 12.8 14.0 19.0 14.1 6.2 26.9 32.3 40.7

m/m % change 1.2 5.6 4.1 9.3 2.1 -1.3 -0.6 0.7 1.9 3.6 -0.9 1.5 2.5 0.5

Monetary Base (NSA, EOP, Mil.NewSoles) N.A. 25,689 25,651 26,027 23,647 23,081 22,811 22,675 21,970 22,044 23,548 20,824 20,528 20,315

y/y % change N.A. 26.5 26.8 23.2 20.9 19.4 17.0 16.3 11.4 9.2 5.5 4.3 -1.4 0.9

m/m % change N.A. 0.1 -1.4 10.1 2.5 1.2 0.6 3.2 -0.3 -6.4 13.1 1.4 1.0 0.4

Money and CreditBroad Money (NSA, EOP, Mil.NewSoles) N.A. 136,862 133,879 130,830 126,820 124,319 123,061 123,691 120,962 118,861 119,249 116,367 113,415 112,051

y/y % change N.A. 22.1 18.4 14.2 14.2 12.3 12.1 9.8 7.3 6.2 5.6 5.3 0.5 3.4

m/m % change N.A. 2.2 2.3 3.2 2.0 1.0 -0.5 2.3 1.8 -0.3 2.5 2.6 1.2 -0.9

Fiscal accountsCentral Govt Current Revenues (NSA, Mil.NewSoles) N.A. 5,846 6,238 5,734 5,628 5,677 8,552 6,742 5,117 6,355 5,347 5,089 5,023 4,771

y/y % change N.A. 22.5 22.6 25.3 25.2 19.5 24.0 36.7 18.6 17.1 5.0 0.7 -12.4 -16.6

Central Govt Current Expenditures (NSA, Mil.NewSoles) N.A. 4,276 4,740 6,913 3,784 4,287 4,125 4,285 4,558 4,074 6,002 4,403 4,270 3,766

y/y % change N.A. 13.5 4.0 -3.7 0.5 9.6 17.5 19.5 2.9 1.8 22.9 25.4 2.7 -9.6

Central Govt Interest Payment (NSA, Mil.NewSoles) N.A. 287 943 353 87 429 299 319 864 394 103 455 453 286

y/y % change N.A. 0.3 5.0 21.7 -67.8 -6.1 84.6 34.0 -6.1 18.3 -65.1 52.2 -15.5 36.8

Central Govt Overall Balance (NSA, Mil.NewSoles) N.A. -117 279 -2,224 416 64 2,046 1,098 -415 2,133 -4,196 -434 -466 -7

12 mth accumulated N.A. -1,816 -1,706 -2,655 -4,142 -4,796 -5,021 -5,256 -6,018 -6,240 -7,046 -4,750 -3,510 -2,455

Central Govt Primary Balance (NSA, Mil.NewSoles) N.A. 170 1,223 -1,871 504 493 2,345 1,417 450 2,527 -4,093 21 -13 279

12 mth accumulated N.A. 3,173 3,282 2,286 736 264 67 -305 -1,147 -1,314 -2,181 307 1,391 2,529



UBS 37

Venezuela Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Sep-09Economic Activity IndicatorsGross Domestic Product Mthly (SA, Mil.Reais) N.A. 293,508 288,855 287,081 298,198 297,762 292,694 294,644 286,744 280,195 298,652 273,186 261,716 266,895y/y % change, NSA N.A. 10.0 9.9 10.0 14.6 16.2 14.3 17.6 15.6 13.7 23.6 7.4 -1.5 2.9m/m % change, SA N.A. 1.6 0.6 -3.7 0.1 1.7 -0.7 2.8 2.3 -6.2 9.3 4.4 -1.9 1.5Industrial Production (NSA, 2002=100) N.A. 133.9 136.4 133.6 128.2 131.0 124.9 133.5 112.2 113.8 118.3 128.6 134.0 125.9y/y % change, NSA N.A. 6.3 8.6 8.7 11.1 14.8 17.3 20.2 18.2 16.1 19.0 5.3 -3.1 -7.6m/m % change, SA N.A. -0.2 -0.2 0.5 -1.2 -0.2 -0.9 3.4 1.3 1.1 0.0 -0.7 3.0 1.9Total Production of Vehicles (NSA, Units) 321,814 304,948 338,939 318,308 306,193 322,547 290,325 339,579 249,799 246,355 252,759 291,492 317,203 273,409y/y % change, NSA 1.5 11.5 14.9 12.9 7.7 19.7 14.3 23.4 22.2 33.2 160.4 47.7 6.7 -9.1m/m % change, SA 8.7 -6.7 5.0 6.5 -9.2 12.3 -14.8 14.7 -1.5 5.1 -4.7 -9.8 21.6 -5.0

Business cycle indicators and surveysConsumer Confidence Index (Scale 0 to 200) N.A. N.A. 162.3 155.2 158.9 152.9 152.1 156.7 159.0 158.7 155.2 153.1 154.3 146.1y/y % change N.A. N.A. 16.1 11.0 18.1 21.6 21.8 22.2 19.7 27.5 22.2 15.5 11.0 4.4m/m % change N.A. N.A. 4.5 -2.3 4.0 0.5 -2.9 -1.5 0.2 2.2 1.3 -0.7 5.6 4.5

ConsumptionRetail Trade Volume (NSA, 2003=100) N.A. 183.3 187.1 179.9 172.3 174.3 165.0 193.6 153.6 161.3 204.3 165.7 170.9 173.0y/y % change, NSA N.A. 11.8 10.5 11.1 11.4 10.2 9.2 15.7 12.2 10.4 9.2 8.6 8.6 5.1m/m % change, SA N.A. -1.4 1.1 3.4 -3.4 6.1 -4.9 13.0 -7.3 -25.5 35.1 -2.3 8.0 -2.6Real Manufacturing Sales (NSA, 2006=100) N.A. 126.6 123.0 118.9 117.0 116.5 111.1 123.8 99.6 95.6 115.6 113.8 117.4 115.1y/y % change, NSA N.A. 10.0 11.6 9.4 9.9 13.3 12.8 14.4 12.0 8.6 13.8 6.8 -3.7 -5.0m/m % change, SA N.A. 1.9 -0.5 3.6 -0.8 1.7 -5.0 4.1 3.9 -4.3 6.5 -2.3 1.5 2.0


Foreign TradeMerchandise Exports (NSA, Mil.US$) 18,381 18,833 19,236 17,673 17,094 17,703 15,161 15,727 12,197 11,305 14,463 12,653 14,082 13,863y/y % change 30.5 35.9 39.0 25.0 18.2 47.7 23.0 33.2 27.2 15.6 4.7 -14.2 -23.9 -30.712 mth accumulated 190,426 186,127 181,157 175,762 172,231 169,605 163,886 161,047 157,129 154,518 152,995 152,349 154,449 158,879Merchandise Imports (NSA, Mil.US$) 16,527 17,740 16,802 16,316 14,817 14,256 13,878 15,058 11,807 11,482 12,285 12,039 12,754 12,539y/y % change 29.6 41.5 55.9 45.3 50.2 52.5 60.9 49.8 50.9 11.4 6.8 -8.2 -25.8 -27.412 mth accumulated 173,007 169,234 164,033 158,006 152,919 147,964 143,056 137,805 132,800 128,818 127,647 126,863 127,943 132,373Merchandise Trade Balance (NSA, Mil.US$) 1,854 1,093 2,434 1,357 2,277 3,447 1,283 669 390 -177 2,178 614 1,328 1,32412 mth accumulated 17,419 16,893 17,124 17,756 19,312 21,641 20,830 23,242 24,329 25,700 25,348 25,486 26,506 26,507

PricesNational CPI [IPCA] (NSA, 12/93=100) 3,149.74 3,126.29 3,112.29 3,111.05 3,110.74 3,110.74 3,097.42 3,079.86 3,063.93 3,040.22 3,017.59 3,006.47 2,994.19 2,985.83y/y % change, NSA 5.20 4.70 4.49 4.60 4.84 5.22 5.26 5.17 4.83 4.59 4.31 4.22 4.17 4.34m/m % change, SA 0.74 0.44 0.01 -0.01 -0.01 0.42 0.57 0.52 0.77 0.73 0.36 0.42 0.28 0.24 Food & Beverages 1.85 1.03 -0.35 -0.85 -0.95 0.26 1.44 1.53 0.94 1.07 0.19 0.60 -0.08 -0.15 Dwellings 0.48 0.40 0.23 0.54 0.40 0.78 0.08 0.32 0.31 0.27 0.17 0.19 0.28 0.62 Housing Goods 0.37 0.46 -0.31 0.29 0.35 0.59 -0.04 1.00 0.36 0.41 0.51 0.43 0.38 -0.03 Dressing 0.89 0.45 0.17 -0.04 0.58 0.91 1.28 0.66 -0.53 0.31 0.76 0.58 0.64 0.57 Transport 0.36 0.13 -0.09 0.08 -0.21 0.09 -0.08 -0.54 0.79 1.45 0.78 0.61 0.51 0.27 Personal Care Products 0.26 0.36 0.26 0.31 0.57 0.74 0.84 0.27 0.23 0.36 0.24 0.24 0.29 0.30 Personal Services 0.64 0.34 0.20 0.54 0.74 0.75 0.66 0.77 0.40 0.78 0.46 0.55 0.20 0.52 Education 0.02 0.08 0.44 -0.03 0.03 0.04 0.11 0.54 4.53 0.26 0.10 0.01 0.04 0.07 Communications 0.29 0.04 -0.03 0.00 0.02 -0.01 -0.03 0.08 0.03 0.00 -0.11 0.01 0.91 0.22Core CPI (NSA,12/90=100) 4,754,340.10 4,733,512.70 4,716,063.30 4,710,410.80 4,699,132.80 4,682,276.60 4,656,201.90 4,636,727.70 4,617,334.90 4,586,149.00 4,559,249.50 4,538,373.00 4,521,642.90 4,510,816.90y/y % change 5.15 4.94 4.87 4.97 5.02 4.93 4.91 5.05 4.85 4.87 4.73 4.60 4.54 4.73m/m % change 0.44 0.37 0.12 0.24 0.36 0.56 0.42 0.42 0.68 0.59 0.46 0.37 0.24 0.31

Financial VariablesExchange Rate (EOP, Reais/US$) 1.70 1.69 1.76 1.76 1.80 1.82 1.73 1.78 1.81 1.87 1.74 1.75 1.74 1.78y/y % change -2.44 -4.72 -6.92 -6.17 -7.69 -7.93 -20.56 -23.08 -23.86 -19.06 -25.50 -24.98 -17.56 -7.12Selic - Target Rate (EOP, %) 10.75 10.75 10.75 10.75 10.25 9.50 9.50 8.75 8.75 8.75 8.75 8.75 8.75 8.75

Central BankForeign Reserves (EOP, NSA, Mil.US$) 284,930 275,206 261,320 257,299 253,114 249,846 247,316 243,953 241,289 240,823 239,054 238,000 232,920 224,213y/y % change 22.3 22.7 19.3 21.4 21.4 21.5 22.9 20.5 21.0 19.9 15.6 15.3 14.6 8.6m/m % change 3.5 5.3 1.6 1.7 1.3 1.0 1.4 1.1 0.2 0.7 0.4 2.2 3.9 2.4Monetary Base (EOP, NSA, Mil.Reais) N.A. 176,002 173,243 162,528 159,628 158,687 154,627 156,710 154,334 155,650 166,073 156,868 147,454 145,698y/y % change N.A. 20.8 26.4 19.9 14.7 19.0 6.8 16.0 13.3 13.2 12.6 18.6 11.1 6.4m/m % change N.A. 1.6 6.6 1.8 0.6 2.6 -1.3 1.5 -0.8 -6.3 5.9 6.4 1.2 6.3

Money and CreditM2 (EOP, NSA, Mil.Reais) N.A. 1,243,118 1,226,186 1,201,036 1,190,047 1,170,767 1,158,509 1,162,640 1,149,969 1,146,429 1,167,424 1,132,000 1,116,968 1,121,189y/y % change N.A. 10.9 11.0 9.3 8.7 8.9 9.1 9.9 8.5 8.7 8.8 9.4 10.2 13.4m/m % change N.A. 1.4 2.1 0.9 1.6 1.1 -0.4 1.1 0.3 -1.8 3.1 1.3 -0.4 1.5Total Credit to Private Sector (NSA, Mil.R$) N.A. 1,546,085 1,517,819 1,483,011 1,464,885 1,436,853 1,408,409 1,392,517 1,375,521 1,363,446 1,355,368 1,331,546 1,312,078 1,293,668y/y % change N.A. 19.5 19.4 18.4 17.3 16.5 15.4 14.6 14.5 13.5 12.9 12.5 12.8 14.3m/m % change N.A. 1.9 2.3 1.2 2.0 2.0 1.1 1.2 0.9 0.6 1.8 1.5 1.4 1.7

Fiscal accountsTotal Revenue (NSA, Mil.R$) N.A. 139,225 69,809 68,561 61,462 65,495 78,570 62,550 57,107 73,899 79,648 74,240 69,410 53,503y/y % change N.A. 160.2 14.8 13.7 11.7 16.3 24.9 11.9 18.1 17.6 14.9 34.3 5.5 -10.8Total Expenditure (NSA, Mil.R$) N.A. 103,288 53,801 59,221 49,817 52,053 50,366 58,091 45,340 49,382 63,831 51,401 47,229 53,206y/y % change N.A. 94.1 13.6 16.1 16.6 18.7 15.8 41.3 17.7 2.0 5.4 13.1 15.9 20.0Central Government Nominal Result (NSA, Mil.R$) N.A. N.A. -9,131 -12,596 -6,413 -12,306 7,055 -14,611 -8,852 1,780 -9,959 -2,272 -114 -22,35612 mth accumulated N.A. N.A. -89,775 -89,937 -90,465 -95,855 -95,013 -105,156 -97,926 -96,039 -107,363 -132,466 -138,361 -127,260Central Government Primary Result (NSA, Mil.R$) N.A. 26,057 4,000 775 665 -511 16,597 -4,556 -1,186 13,866 1,921 10,663 11,235 -7,81412 mth accumulated N.A. 79,525 45,655 45,038 45,772 44,489 44,633 38,067 49,250 49,325 39,436 17,521 2,439 6,072


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Analyst Certification

Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report.


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Required Disclosures This report has been prepared by UBS Securities LLC, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS.

For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results. Additional information will be made available upon request. Company Disclosures

Issuer Name Argentina Brazil Chile Colombia Mexico Peru (Republic of) Venezuela

Source: UBS; as of 16 Nov 2010.


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