04 de diciembre de 2009 No. 121

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1 WEEKLY EMANA NEWS QUE PASÓ MAY de diciembre de 2009 No. 121 Bolivia S&P Raises Bolivia s Rating to B with Positive Outlook 7/05/2010 The rating agency Standard & Poor s (S&P) raised Bolivia s foreign-currency rating to B from B-, with positive outlook. S&P said in a statement that the rating increase reflects the solid and continuous improvement in Bolivia s external indicators resulting from the current account surplus, the increase in international reserves, and the improved fiscal performance shown in the past four years. Colombia IMF Approves USD3.46 Billion Arrangement 10/05/2010 The Board of Directors of the International Monetary Fund (IMF) approved the one-year Flexible Credit Line (LCF) requested by Colombia for approximately USD3.46 billion. The credit line is precautionary because the country will only make use of the resources under extreme conditions. The LCF seeks to strengthen investor confidence and facilitate the access to financing in international markets. Perú GDP Grows by 6.0% in First Quarter of /05/2010 According to figures released by the National Institute of Statistics and Informatics, the economy showed an annual growth rate of 6.0% from January to March This figure is higher than the one reported for the same period in 2009 (2.0%). The sectors that weakened in 2009 (manufacture, construction, and trade) recovered during the first three months of Manufacture, construction, and trade grew annually by 7.3%, 16.8%, and 8.1%, respectively. As a result, internal demand data show a growth rate of 5.5% from January to March, with respect to the same period in 2009.

2 According to the Macroeconomic Expectations Survey of April conducted by the Central Bank, economic analysts and the financial sector expect, for 2010, a growth rate of 5.5%; while non-financial entities expect growth to reach 5.0%. In 2009, the economy grew by 0.9%. BCRP Raises Reference Rate to 1.5% 7/05/2010 The Central Bank of Reserve of Peru (BCRP) raised the reference rate to 1.5% from 1.25%, considering that indications of growth in output, in an environment lacking inflationary pressures, allow for a reduction of the monetary stimulus. The BCRP explained that this decision does not imply the start of a series of rises in the reference rate since that will depend on the evaluation of the determinants of inflation. Uruguay Manufacturing Industry Grew 5.2% Annually in March /05/2010 According to the National Institute of Statistics (INE), the manufacturing industry grew by 5.2% with respect to the same month in This figure represents the fifth month of growth after seven consecutive months of annual declines. Excluding oil refining, the climb reaches 11.2%. In the January-March period, the activity of the manufacturing industry grew by 3.1% compared to the same period in Excluding oil refining, the climb reaches 6%. Government Lifts Growth Forecast 11/05/2010 On May 10, the Secretary of Economy and Finance, Fernando Lorenzo, informed that the GDP growth forecast for 2010 was raised from 4% to 5.1%. Similarly, the GDP growth expectations for 2011 locate at approximately 4.2%. Venezuela Current Account Shows Surplus of USD7,181 Million in First Quarter 26/05/2010 In the first quarter of 2010, the balance of payments showed a surplus in the current account of USD7,181 million and a deficit in the financial account of USD11,511 million. 2

3 Exports reached USD16,424 million, which is above the figure reported for the same quarter in the prior year (USD9,840 million). Imports decreased to USD6,883 million from USD11,155 million in As a result, the balance of trade in goods amounted to USD9,541 million. During this period, the Central Bank of Venezuela transferred USD5,000 million to the National Development Fund (FONDEN). International reserves showed a negative variation of USD6,121 million as a result of the balance of payments transactions. Net international reserves amounted to USD28,904 million at the end of the quarter. Economy Contracted by 5.8% in First Quarter 26/05/2010 In the first quarter of 2010, the economy contracted by 5.8% with respect to the same period in This performance is a result of the drop in the Oil and Non-oil sectors (- 5.0% and -4.9%, respectively). The sector that showed the highest growth rate was Communications (9.7%), followed by Community services (2.8%). On the contrary, the sector with the lowest growth rate was Transportation and storage (-15.9%), followed by Trade and repair services (- 11.6%). Imports and GDP contracted by 39.7% and 5.8%, respectively. Consequently, aggregate supply grew by -16.7%. On the aggregate demand side, internal demand grew by -17.8% between January and March 2010 with respect to the same period in the prior year. External demand grew by -8.1%. National Assembly Approves Reform to Law against Exchange Offenses 14/05/2010 The National Assembly (AN) approved the reform to the Law against Exchange Offenses, under which the Central Bank of Venezuela (BCV) will have exclusive competence on currency trading either in hard currency or in securities. Previously, these operations were conducted through authorized brokers. With this reform, the BCV may also establish a foreign exchange band for the sales and purchases of the dollar in the unregulated parallel market. 3

4 Exchange Rate at May 25, 2010 Exchange Rate, Devaluation (%) Selling Rate Weekly Monthly This Year Last 12 Months Bolivia (BVS) 7,07 0,00 0,00 0,00 0,00 Colombia (COP) ,8-2,52 0,25-3,79-10,96 Costa Rica (CRC) 545,6 1,08 5,62-4,58-6,13 Peru (PEN) 2 2,85 0,07-0,03-1,54-5,40 Uruguay (UYU) 19,16-0,81-0,98-2,41-18,53 Venezuela (VEF) 2,6 0,00 0,00 20,93 20,93 (1) Representative Market Rate (RMR). (2) Interbank Rate. Source: Central Banks. EMBI Spread at May 25, 2010 EMBIG SPREAD (bps) A Week A Month 6 Months A Year 25/05/2010 Ago 18/05/ /04/ /11/ /05/2009 Colombia Ecuador Peru Uruguay Venezuela Emerging Markets Latin America Argentina Brazil Chile Mexico Panama Source: JP Morgan.

5 EMBI+ SPREAD (bps) A Week A Month 6 Months A Year 25/05/2010 Ago 18/05/ /04/ /05/ /05/2009 Colombia Ecuador Peru Venezuela Emerging Markets Latin America Argentina Brazil Mexico Panama Fuente: JP Morgan. Inflation Rate at April 2010 Monthly This year Last 12 months Goal Bolivia -0,43 0,09-0,64 0,31 5,32 1,22 8,0 a 3,5-5,5 a Colombia 0,32 0,46 2,26 2,25 5,73 1,98 4,5-5,5 2,0-4,0 Costa Rica 0,33 0,06 1,17 2,63 11,75 5,56 4,0-6,0 b 5,0(+/-1%) Ecuador 0,65 0,52 2,95 1,86 6,52 3, Perú 1 0,02 0,03 0,41 0,93 4,64 0,76 1,0-3,0 1,0-3,0 Uruguay -0,04 0,18 1,25 2,64 7,13 7,35 3,0-7,0 4,0-6,0 Venezuela 1,82 5,20 6,72 11,30 28,28 30,42 15c 20-22c 1 Lima Metropolitana. Source: National Bureaus of Statistics and Central Banks.

6 Sources Bolivia: Daily News of Bolpress, El Diario, La Razón, El Mundo, El Deber y Prensa Latina; Central Bank of Bolivia, National Bureau of Statistics (INE), International Monetary Fund (IMF) and Andean Community, Web pages of Central Bank of Bolivia Reuters, Agencia Boliviana de Información, Latin Finance Colombia: Daily News of El Colombiano, El Tiempo, La República y Portafolio. Bank of the Republic. Presidency of Republic of Colombia, DANE, Reuters, News Caracol Radio, página del DANE, El Comercio y Negocios, AFP. Costa Rica: Daily News of La Nación, La Prensa Libre, Diario Extra, La República, El Financiero; Central Bank of Costa Rica; National Bureau of Statistics (INEC); Financial and Economic Advisors S.A (CEFSA).; Cámara de Bancos e Instituciones Financieras de Costa Rica, Web pages of S&P and JP Morgan, web page of Telenoticias. Ecuador: Daily News of El Comercio, El Expreso, Hoy and El Universo; Web pages of Central Bank of Ecuador, Ministry of Economy and Finance, Andean Community and JP Morgan, página web de Petroecuador. Perú: Daily News of El Comercio, La República, Expreso and La Razón, El Peruano, Andean Community, Central Reserve Bank of Peru; National Bureau of Statistics (INEI), FMI, Deutsche Bank and Citibank, web page of Central Reserve Bank of Peru, Agencia Peruana de Noticias, Notas de prensa de la Comunidad Andina, National Administrative Department of Statistics Uruguay: Presidencia del Uruguay, diarios La República, El País, El Observador, Últimas Noticias, El Espectador. Web page of Montevideo Portal, Invertia y Radio Sarandi, Central Bank of Uruguay. Venezuela: Daily News El Universal and El Nacional; Central Bank of Venezuela, Ministry of Finance, Venezolana de Televisión, National Bureau of Statistics (INE), Integrated National Service of Custom and Tax Administration (SENIAT), Andean Community and JP Morgan, Union Radio, Daily Brief Latin Finance. Written by: Macroeconomic Surveillance Dennis Meléndez dmelende@flar.net Carlos Giraldo cgiraldo@flar.net Lina María Castro lcastro@flar.net María Alejandra Olarte molarte@flar.net 6

7 Adriana Carolina Díaz 7