Economic Outlook

Jorge Guillén, Ph.D

ESAN
Uncertainty in the markets
The world Growth of GDP

Source: IMF
China
The Region (LAC): Outstanding
Growth
Latin America GDP and Percapita GDP
GDP (PPP) in GDP (PPP) per
Rank Country millions capita
(US $) (US $)
1  Brazil 3,370,620 16,111
2  Mexico 2,575,206 20,644
3  Argentina 918,572 20,609
4  Colombia 748,575 15,021
5  Chile 480,965 25,891
6  Peru 458,389 14,252
7  Venezuela 320,138 10,968
8  Ecuador 199,720 11,732
9  Dominican R. 188,320 18,323
10  Guatemala 145,249 8,413
11  Panama 111,432 26,794
12  Paraguay 95,011 13,471

France: Per capita: US$ 40,000 // GDP :

US$ 2.6 Trillions
Metal and all commodities
Example: In Perú…

Economic Indicators
Entrepreneur Expectations for Growth
 Formal and Informal Employment
(%)

10

-2
 Formal Employment in the private sector
(mill of Jobs)

2017 2018
3.61 3.83
3.59 3.58 3.73
3.55
3.6
3.5 3.56
3.52
3.46 3.46
3.44

Jun Jul Ago Sep Oct Nov Dic Ene Feb Mar Abr May Jun
Peruvian Budget Balance (% GDP) compare to first graph

*Forecast
Source : BCRP
Exposition to Natural Disasters
Peru Less Expose even hard Natural Disaster (Flood)
Less Damage even more harmuf desaster: Exposition

1998 2017
Casualties
Deaths
Colapsed Bridges
Destroyed Highway
Destroyed Farms
Destroyed Buildings
Destroyed Schools
Health Centers Destroyed
Affected Farms
Building Affected
Schools Affected
Health Centers Affected
Risk of Growth
Internal Risks

• Social Pressures: Laws and government expenditure is

slow
• Drop in presidential approval

External Risk

• Financial Crisis: Spain, Greece and PIGS

• Behavior of China in the long run
• War China-USA
 10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0

0.0
Canada
Austria
New Zealand
Singapore
Vietnam
Hong Kong,
Mongolia
Slovak Republic
Sweden

Source: World Banks and Doing Business 2003

Jordan
Israel
India
Argentina
INFORMALITY

Italy
Korea, Rep.
Greece
Lithuania
Turkey
Botswana
Algeria
Uzbekistan
Rom ania
Jamaica
Bulgaria
Nepal
Madagascar
Cote d'Ivoire
Malawi
Niger
Senegal
Moldova
Russian
Zam bia
Guatemala
Nigeria
Peru
Bolivia
 Commitment of Contracts

Uruguay 620
Bolivia 591
Brazil 566
Costa Rica 550
Argentina 520
Venezuela 445
Peru 441
Mexico 421
Ecuador 388
Colombia 363
Panama 355
Chile 305
Paraguay 285

0 200 400 600

Fuente: World Economic Forum 2002

 Law Independence

7.0
6.3
7 for complete, 1 for no independence
6.0
5.3

5.0
4.3
4.1
4.0 3.5
3.3

3.0 2.7
2.1 2.0 2.0
2.0 1.7

1.0
Reino Unido

Ecuador
Colom bia
Uruguay

Argentina
Brasil

Bolivia
Chile

Venezuela
Peru
Alem ania

México

Fuente: World Economic Forum 2002

 Poverty: Latam vs Peru
in % of total of population
70.00%

58.70%
60.00%
55.60%

50.00% 49.20%

42.40%
39.70%
40.00% 37.30%
36.20%
34.00% 33.80% 33.50% Latam
30.80% 29.60% Peru
29.20%
30.00% 27.80% 28.10% 28.10% 28.20%
25.80%
23.90% 22.70%
21.80% 20.70% 21.70%
20.00%

10.00%

0.00%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Good Example of Inequality

Same Sea placement and the restaurant

view in a fancy restaurant
Real State in LAC
Real State in LAC: Bubble??
Supply of Apartments in Lima
(units)
 Urban Peru: Socioeconomic Structure
% of Households

A B C D E

2004 2014 2021

Higher class (A) 0.4% 2% 3%

Consolidated
4
middle class (B) %
13% 16%

Emerging
middle class (C) 25% 31% 36%

Emerging lower 44% 36% 31%

middle class (D)

Lower class poor 27% 18% 14%

(E)
Households: 4.2 Households: 6.0 Households: 7.7
mm mm mm
 250
500
750
1000
1250
1500
1750
2000

0
Jan-02
Jun-02
Nov-02
Apr-03
Sep-03
Feb-04
Jul-04
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Mar-11
Aug-11
Jan-12
Jun-12
Nov-12
Apr-13
Sep-13
Feb-14
Jul-14
Dec-14
Average Price in Lima by M2 in Nominal US Dollars

May-15
Oct-15
Mar-16
Aug-16
Jan-17
Jun-17
Nov-17
Apr-18
 100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
900.00
1000.00

0.00
Jan-02
May-02
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US Dollares

May-07
Sep-07
Jan-08

Income
May-08
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May-10
Sep-10
Jan-11

Ingreso Promedio Mensual

May-11
Sep-11
Jan-12
May-12
Sep-12
Precio

Jan-13
Price M2
M2

May-13
Sep-13
Jan-14
May-14
Sep-14
Average Monthly Income and Average Price M2 in Lima

Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
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May-17
Sep-17
Jan-18
May-18
0
200
400
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1600
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2000
 10.00
12.00
14.00
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26.00
Jan-02
May-02
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May-14
Feasinble Area to acquire by a citizen with a 30 year mortgage

Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
LACK OF INFRAESTRUCTURE
Infraestructure : Romans and Cities
Animation of Cars: Relevance of Transportation
 Country Population
1  Brazil 204,519,000
2  Mexico 127,500,000
3  Colombia 48,218,000
France (66 mill.)
4  Argentina 43,132,000
5  Peru 31,153,000
6  Venezuela 30,620,000
7  Chile 18,006,000
8  Ecuador 16,279,000
9  Guatemala 16,176,000
10  Cuba 11,252,000
Debt and Risks
Sustained improvement in sovereign ratings

Aa3 Chile

A3 Mexico
Baa1
A3 Peru

Baa
Ba1 Colombia
2
Ba1

B3

199 201
Asian are less expose (Debt ratings)