assessing the impact of the global economic crisise7%e3o... · são paulo, brazil, june 13, 2013 ....
TRANSCRIPT
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Assessing the Impact of the
Global Economic Crisis
Carlos Hamilton Araújo São Paulo, Brazil, June 13, 2013
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Outline
1. Main channels
– Commodity prices
– Trade flows
– Capital flows
2. Global Impact
– Economic activity
– Inflation
– The fiscal issue
3. Brazilian Perspective
– Impact of the crisis
– Macroeconomic developments
– Prospects
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– Commodity prices
– Trade flows
– Capital flows
1. Main Channels of Transmission
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4 Source: CPB - Netherland Bureau for Economic Policy Analysis
Commodities Main Channels
100
130
160
190
220
250 Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10
Jan
-11
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Manufacturing Price Index Commodities Prices (Ex energy)
price
in
de
x e
vo
lutio
n
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5 Sources: Thomson Datastream, CPB
Trade Main Channels
80
90
100
110
120
130
2008 2009 2010 2011 2012
Export & import volumes
X - Adv economies X - Emerging economies
M - Adv economies M - Emerging economies
2007=
100
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Capital Flows
Source: IIF
Main Channels
0
200
400
600
800
1000
1200
1400
2004 2005 2006 2007 2008 2009 2010 2011 2012e
US
$ b
illio
n
Private flows to EME, net
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2. Global Impact
– Economic activity
– Inflation
– The fiscal issue
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4,6
2,3
7,6
5,3
2,9
0,5
5,6
3,3
0
1
2
3
4
5
6
7
8
9
World Advanced Economies
Emerging & Developing Economies
Latam & Caribe
GDP annual change (average) PPP weights
2004-08 2008-12
Impacts
Average GDP Growth Has Been Lower
Sources: Thomson Datastream, IMF WEO
%
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9
4,8
8,4
5,4 5,4
3,4
7,7
3,2
5,5
3,9 4,0
1,7
6,5
0
1
2
3
4
5
6
7
8
9
Brazil Argentina Chile Colombia Mexico Peru
GDP annual change (average)
2004-08 2008-12
Sources: Thomson Datastream, IBGE, INDEC, INE, DANE, INEGI, INEI
Latam Overview Impacts
%
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10 Sources: Thomson Datastream, IMF (WEO)
Impacts
4,1
2,3
6,6 6,4
4,0
1,8
6,5 6,5
0
2
4
6
8
World Advanced Economies
Emerging & Developing Countries
Latam
2004-08 2008-12
World CPI: About the Same %
CPI average annual change
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11 Sources: Thomson Datastream, IMF (WEO)
In Latam, Different Trends in CPI Inflation Impacts
5,4
8,8
4,7
5,6
4,6
3,3
5,7
9,2
2,9
3,8
4,5
3,3
0
2
4
6
8
10
Brazil Argentina Chile Colombia Mexico Peru
2004-08 2008-12
CPI average annual change
%
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12 Sources: CPB (Netherland Bureau for Economic Policy Analysis), FAO
Commodity Prices Affect CPI and Trade Impacts
100
120
140
160
180
200
Manufacturing Prices Commodities Prices (Ex-energy)
Food Price Index (FAO)
2004-08 2008-12
+26%
+11%
+37%
ind
ex
price index average
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13 Source: IMF Fiscal Monitor, April 2013
Gross Debt: Higher in Advanced Economies Impacts
81,5
110,7
33,6 34,8
0
20
40
60
80
100
120
2008 2012*
Advanced Economies Emerging Economies *2012: projection
% G
DP
General Government Gross Debt, 2008-12*
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EME Financed Part of Debt Growth in Advanced Economies Impacts
2.491
3.691
4.855
7.245
0
1000
2000
3000
4000
5000
6000
7000
8000
2008 2012
Advanced Economies Emerging Economies
Sources: Thomson Datastream, IMF COFER
Foreign Reserves
US
$ b
illio
n
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Why have EME been Resilient to External Shocks?
• International reserve accumulation;
• Floating exchange rates;
• Allowance of countercyclical Fiscal policy;
• Tougher regulation and bank supervision; and
• Progress in the institutional framework.
Impacts
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3. Brazilian Economy
– Impact of the crisis
– Macroeconomic developments
– Prospects
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17
Brazil: IC-Br (US$) & Terms of Trade Brazilian Economy
Sources: BCB, Funcex
70
90
110
130
150
170
190 M
ay-0
4
Sep
-04
Jan
-05
May-0
5
Sep
-05
Jan
-06
May-0
6
Se
p-0
6
Jan
-07
May-0
7
Sep
-07
Jan
-08
May-0
8
Sep
-08
Jan
-09
May-0
9
Sep
-09
Jan
-10
May-1
0
Sep
-10
Jan
-11
May-1
1
Sep
-11
Jan
-12
May-1
2
Se
p-1
2
Jan
-13
May-1
3
IC-Br (US$) Terms of trade*
2006=
100
*up to Mar 13
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18
Capital Inflow to Brazil Brazilian Economy
Source: BCB
0
30
60
90
120
150
180 abr
04
ou
t 0
4
abr
05
out 05
abr
06
out 06
abr
07
out 07
abr
08
out 08
abr
09
out 09
abr
10
out 10
abr
11
out 11
ab
r 1
2
out 12
abr
13
US
$ b
illio
n
FDI, Portfolio and Other Foreign Investments (12 months, net) FDI (12 months)
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Brazil: Trade Volumes Brazilian Economy
Sources: BCB, Funcex
98,7 100,4 106,7
155,7
30
50
70
90
110
130
150
170
2004-08 2008-12
2006 =
100
Exports Imports
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Brazil: Destination of Exports has Changed
25,6%
15,9%
9,1% 6,8%
9,1%
3,7%
29,8%
Sources: BCB, Funcex
20,6%
11,2%
7,6%
17,3%
14,3%
3,4%
25,6%
European Union USA Argentina
China Emerging Asia (- China) Other advanced economies
Other developing countries
Brazilian Economy
2007 2012
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Brazil: Lower Growth and Higher Inflation Brazilian Economy
Source: IBGE
4,8
3,2
5,4 5,7
0
1
2
3
4
5
6
2004-08 2008-12
%
Real GDP growth IPCA change
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Brazilian Economy
• Macroeconomic Framework
- Inflation targeting
- Fiscal responsibility
- Exchange rate flexibility
• Complemented by
- International reserves
- Prudential policy and bank supervision
Brazilian Economy: Tool Kit
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23 Sources: IBGE, BCB
Inflation – IT Period %
yoy
Brazilian Economy
0
2
4
6
8
10 m
ai 04
nov 0
4
mai 05
nov 0
5
mai 06
nov 0
6
mai 07
nov 0
7
ma
i 0
8
nov 0
8
mai 09
nov 0
9
mai 10
no
v 1
0
mai 11
nov 1
1
mai 12
nov 1
2
ma
i 1
3
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24
Fiscal: Downward Trend in Net Debt
Source: BCB
% o
f G
DP
Brazilian Economy
% o
f G
DP
50,6
48,4 47,3
45,5
38,5
42,1
39,1
36,4 35,2
1,5
2,0
2,5
3,0
3,5
4,0
20
25
30
35
40
45
50
55 2
00
4
20
05
20
06
20
07
20
08
20
09
20
10
2011
20
12
Net public debt (LHS) Primary surplus (RHS)
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25 Source: BCB
FX and International Reserves U
SD
bn
Brazilian Economy
BR
L/U
S$
1,4
1,6
1,8
2,0
2,2
2,4
2,6
2,8
0
50
100
150
200
250
300
350
400 dez 0
4
jun
05
dez 0
5
jun
06
de
z 0
6
jun
07
dez 0
7
jun
08
dez 0
8
jun
09
dez 0
9
jun
10
dez 1
0
jun 1
1
dez 1
1
jun
12
dez 1
2
international reserves (LHS) exchange rate (RHS)
up to May 13
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26 Source: BCB
Capital Adequacy Ratio Brazilian Economy
13,8
14,8
16,6
19,0 18,5
17,4 17,8 17,3
17,7
18,9
16,9 16,3 16,4
0
5
10
15
20 2
00
0
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
2011
20
12
Brazilian banks capital ratio Basel minimum capital ratio regulatory minimum capital ratio
%
leverage ratio: 9.9
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Sources: IBGE, BCB *Market Expectations (Focus – June 7, 2013)
Brazil: Growth Prospects Perspectives
5,2
-0,3
7,5
2,7
0,9
2,5
3,2 3,2 3,5 3,5
-1
0
1
2
3
4
5
6
7
8
2008 2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017*
%
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Brazil: Inflation Prospects Perspectives
Sources: IBGE, BCB *Market Expectations (Focus – June 7, 2013)
5,9
4,3
5,9
6,5
5,8 5,8 5,8 5,5
5,2 5,2
0
1
2
3
4
5
6
7
2008 2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017*
%
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Brazil: Primary Surplus Prospects Perspectives
Source: BCB *Market Expectations (Focus – June 7, 2013)
3,4
2,0
2,7
3,1
2,4
1,8
1,6
2,0 2,0 2,0
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2008 2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017*
% o
f G
DP
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Perspectives: FDI Perspectives
Source: BCB *Market Expectations (Focus – June 7, 2013)
45,1
25,9
48,5
66,7 65,3
60,0 60,0 60,0 60,4 58,0
0
10
20
30
40
50
60
70
80
2008 2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017*
US
$ b
illio
n
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• With regard to inflation:
- The Central Bank has been and will continue
to be fully committed with its assignment of
maintaining price stability. So inflation has
been and will continue to be under control.
• With regard to growth:
- The agenda of concessions of ports, airports,
railway and highways; as well as oil exploration
permissions will contribute to boost investment
and growth in the medium term.
Perspectives
Final Word
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Assessing the Impact of the
Global Economic Crisis
Carlos Hamilton Araújo São Paulo, Brazil, June 13, 2013