Latin America

Given the slowdown in the global economy, we review the market consensus at the end of the first quarter of 2012 for Latin America and make some comments on the possible impact on the region.

• Colombia. While exports could be affected by the possible decrease in oil prices, we believe that structural reforms and economic integration strategies undertaken by President Santos will stimulate the growth of private investment and capital flows.

• Panama. Although there is a slowdown in economic growth, we still believe that the negative effects of the global economy will have little impact. What we do believe is that the economy needs some major reforms in education to sustain economic growth in the long term and keep an eye in a possible housing bubbles.

• Dominican Republic. On the eve of a presidential election on May 20, the Dominican Republic will go through a transition period until August and the new government will outline the new negotiations with the IMF and the economic measures it will take to reduce the fiscal deficit and to have access to international financing. A drop in oil prices could improve their trade deficit.

• Venezuela. In anticipation of the release of Q1 economic growth in Polinomics maintain an estimate well below the consensus of other analysts. While the increase in monetary liquidity can improve cash flow of companies, we believe that private consumption will not recover so easily. A drop in oil prices affects the already precarious fiscal situation and the availability of dollars for private sector imports.

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