LATAM Economic Update: Exchange Rates, Inflation, Markets & More - Feb 2021

LATIN
AMERICA
UPDATE
February 2021
www.nuricumbo.com

Fresh start with a new U.S. administration

A Biden government that will be ready to engage
again with the world

A world where China, not the U.S., will become the
growth engine for the next 20 years

China has become a magnet for
foreign direct investment

Full recovery will take years and will be very
different from country to country

Some tough challenges lie ahead

Mexico continues to offer attractive real returns,
which is key to prevent MXN devaluation

Investment in Latin America is becoming
more and more difficult

Latam Travel Market not expected
to fully recover before 2024

The 2010s were not good for
GDP per Capita growth in Latam

Even before Covid, labor informality was a key
weakness in Latin America

Income in Latin America has remained stagnant

Best recovery of financial markets
has been recorded in Asia

Worldwide, coronavirus second wave is much
worse than the first one

Initial data from Israel shows the
promising results of vaccines

COMPANY
PROFIT
Our Firm at a glance
Key Facts Industries
• 50+ CONSULTANTS
• MULTIDISCIPLINARY
• BIG 4 BACKGROUND
• INTERNATIONAL
EXPOSURE
• ACTIVE ACROSS MEXICO
• ABLE TO TRAVEL
• FLEXIBILITY
• BILINGUAL / BICULTURAL
Professional
Organizations
Our Service
Portfolio
• MANUFACTURING
• FINANCIAL SERVICES
• PROFESSIONAL SERVICES
• TRADING
• RETAIL
• ADVERTISING
• EDUCATION
• PRIVATE EQUITY
• FAMILY BUSINESS
• MEXICAN INSTITUTE OF
PUBLIC ACCOUNTANTS
• MEXICO CITY ACCOUNTANCY
BOARD
• MEXICAN INSTITUTE OF
FINANCIAL EXECUTIVES
• ILLINOIS ACCOUNTANCY
BOARD
• AMERICAN CHAMBER OF
COMMERCE
• EXTERNAL AUDIT
• INTERNAL AUDIT
• PART TIME CFO’S
• INTERIM
MANAGEMENT
• FORENSIC
• TAX
• TRANSFORMATIONS
• ADVISORY BOARD
For more information: www.nuricumbo.com
BANAMEX FONATUR Y&R ZIMAT NOKIA CIT PFIZER METLIFE
LESAFFRE
PWC DELOITTE IPG BOMBARDIER BANORTE +GF+ MERLIN
KANDEO SGS
1985 1990 2000 2003 2010 2013 2014 2017 2020
Professional Careers
History
Experience as Independent Consultant Experience as Consulting Group

WE SUPPORT SENIOR MANAGEMENT IN THE
RESOLUTION OF SPECIAL OR CONFIDENTIAL
PROJECTS.
 Ideal to tackle those projects that are crucial
but sometimes difficult to deliver internally.
 Teams of highly experienced consultants.
 Our consultants have on average 20/25
years of professional experience.
 Reduced learning curve / More productivity.
 High degree of flexibility.
 Solid specialization in Finance, Audit, Tax and
Accounting.
 Big Four / Big Consulting background.
Who are we?

 Internal and External Audit.
 Special reviews (financial, process,
operational, compliance, forensic, etc.)
 Financial Due Diligence for M&A.
 Tax Compliance.
 Comisarios. Board Members. Advisory Board.
 Interim C-Level Executives (CEOs, CFOs, etc.)
 Interim Project Teams.
 Specialized Training Programs.
 Debt/Equity Solutions.
 Fintech Trusts (Fideicomisos).
How do we help some of our clients?

“Armando is a much travelled accountant with international experience in commercial sector and
proven language skills. Through working with a wide range of business and in many different
countries he has developed the skill of analyzing how organizations operate in a wide variety of
geographical locations and business environments and in the assessment of internal controls.” –
Eduardo Mediavilla, Protiviti Spain
“The firm’s international experience and knowledge of consulting methodology makes them a
valuable asset to any company. I've worked with them during mandates in Germany and Canada,
and I know they strive for on-time and quality deliverables.” – Victor Terreros, Senior Project
Manager, Bell Canada
“Nuricumbo has experienced professionals with a great can-do attitude and an ability to
communicate effectively to reach set goals. My confidence in Armando's firm was demonstrated by
hiring them for a complex project with implications in Mexico and The U.S., which was successfully
delivered and at a very competitive cost.” – Henry Gonzalez, Senior Audit Manager, WPP
“The Nuricumbo firm has been fundamental to finally establish solid and reliable finance business
practices for our company in Mexico. Their vast international exposure to different types of
companies translates into deep knowledge in corporate governance applicable to companies of any
kind or size.” – Inaki Mazzaredo, VP Latam Georg Fischer
Some testimonials

WHAT WE THINK
What to Expect from 2021
Winning an election does not resolve our problems
The reinvention of big global cities
North America: From shared prosperity to failed state
Who will win the U.S. elections?
Will we avoid another lost decade?
Inequality is not a good business
The Lebanese mirror
Wirecard, external audit and the public interest
OUR YOUTUBE CHANNEL
Book Review: Why Nations Fail
Walter Buchanan: US Elections 2020
Vestiga Consultores: Información y pandemia
Historic Lessons of the 1918 Pandemic
Willingness to Pay & Value Stick
James Francum – Perspective from Germany
Toshiyuki Yasui: Chief Happiness Officer
Antonio Prida: Mediación
Oscar Becerril: Cómo superar COVID-19
OTHER
Riesgo Global: Relación Estados Unidos - China
Ranking Empresas Zombies Mexico: Q2 2020
Mexico’s Top 25 CFO’s of 2017
¿Por qué medir la confianza económica?
Nuricumbo + Partners in the Media

$5.33 $5.19 $5.46
$0.00
$2.50
$5.00
$7.50
November December January
Brazil
Exchange Rates
$3,621.95 $3,439.00 $3,569.07
$0.00
$1,500.00
$3,000.00
$4,500.00
Colombia
$20.16 $19.90 $20.58
$0.00
$10.00
$20.00
$30.00
Mexico
$3.60 $3.62 $3.63
$0.00
$1.50
$3.00
$4.50
Peru
Source: Exchange Rates UK, 2021.
*USD / PEN
*USD / MXN
*USD / CLP
*USD / BRL
*USD / COP
$761.92 $710.50 $734.81
$0.00
$300.00
$600.00
$900.00
Chile
*USD / CLP
$81.32 $84.08 $87.30
$0.00
$30.00
$60.00
$90.00
$120.00
Argentina
*USD / ARS

Source: Argentina, Brazil, Colombia, Chile, Mexico and Peru Central Banks, 2021.
37.20% 35.80% 36.10%
0.00%
15.00%
30.00%
45.00%
October November December
Argentina
Inflation Rate
3.92% 4.31% 4.52%
0.00%
1.50%
3.00%
4.50%
September October November
Brazil
2.14% 1.97%
2.68%
0.00%
0.90%
1.80%
2.70%
3.60%
Peru
1.75%
1.49% 1.61%
0.00%
1.00%
2.00%
3.00%
Colombia
3.00% 2.70% 3.00%
0.00%
1.50%
3.00%
4.50%
Chile
4.09%
3.33% 3.15%
0.00%
1.50%
3.00%
4.50%
Mexico

$38,622 $39,546 $39,473
$0
$15,000
$30,000
$45,000
$60,000
Argentina
International Reserves
$356,606 $354,546 $356,004
$0
$120,000
$240,000
$360,000
$480,000
Brazil
$56,919 $57,245 $59,031
$0
$18,000
$36,000
$54,000
$72,000
Colombia
$37,709 $39,200 $39,850
$0
$13,000
$26,000
$39,000
$52,000
Chile
$194,288 $195,667 $195,946
$0
$60,000
$120,000
$180,000
$240,000
Mexico
$71,723 $74,707 $76,474
$0
$20,000
$40,000
$60,000
$80,000
Peru
*Million U.S. Dollars
Source: Argentina, Brazil, Colombia, Chile, Mexico and Peru Central Banks, 2021.

54,572.54 51,226.49 48,257.14
0
16,000
32,000
48,000
64,000
Argentina
Capital Markets
108,893.32 119,017.24 115,067.54
0
35,000
70,000
105,000
140,000
Brazil
1,258.00
1,437.89 1,348.12
0
500
1,000
1,500
2,000
Colombia
41,778.87 44,066.88 42,985.73
0
12,000
24,000
36,000
48,000
Mexico
4,032.87 4,177.44 4,288.65
0
1,200
2,400
3,600
4,800
Chile
*IPSA:IND
*MEXBOL:IND
*SPBLPGPT:IND
*MERVAL:IND
*IBOV:IND
*COLCAP:IND
Source: Trading Economics, Yahoo Finance, 2021.
19,796.51 20,822.15 21,110.22
0
7,000
14,000
21,000
28,000
Peru
*SPBLPGPT:IND

Foreign Direct Investmet
$11,517 $11,873
$6,663.00
$0
$4,000
$8,000
$12,000
2017 2018 2019
Argentina
$68,885
$78,162 $73,504
$0
$30,000
$60,000
$90,000
2017 2018 2019
Brazil
$13,836
$11,535
$14,314
$0
$5,000
$10,000
$15,000
$20,000
2017 2018 2019
Colombia
$6,128 $7,323
$11,928
$0
$4,000
$8,000
$12,000
2017 2018 2019
Chile
$33,030 $37,682
$29,360
$0
$12,000
$24,000
$36,000
$48,000
2017 2018 2019
Mexico
$6,860 $6,488
$8,892
$0
$3,000
$6,000
$9,000
$12,000
2017 2018 2019
Peru
Source: The World Bank, 2021. *BoP, Million U.S. Dollars at Current Prices

Credit Ratings
Argentina
CCC
(September 10, 2020)
Source: Fitch Ratings, 2021.
Brazil
BB-
With NEGATIVE Outlook
(November 18, 2020)
Colombia
BBB-
(November 6, 2020)
Chile
A-
With STABLE Outlook
(October 15, 2020)
Mexico
BBB-
With STABLE Outlook
(November 11, 2020)
Peru
BBB+
(December 15, 2020)

Credit Ratings
Argentina
Ca
With STABLE Outlook
(September 28, 2020)
Source: Moody’s Investors Service, 2021.
Brazil
Ba2
With STABLE Outlook
(May 15, 2020)
Colombia
Baa2
(December 3, 2020)
Chile
A1
(August 25, 2020)
Mexico
Baa1
(April 17, 2020)
Peru
A3
With STABLE Outlook
(June 25, 2019)

Credit Ratings
Argentina
CCC+
With STABLE Outlook
(September 7, 2020)
Source: Standard & Poor’s, 2021.
Brazil
BB-
With STABLE Outlook
(December 10, 2020)
Colombia
BBB-
(October 28, 2020)
Chile
A+
(April 27, 2020)
Mexico
BBB
(December 3, 2020)
Peru
BBB+
With STABLE Outlook
(November 23, 2020)

Country Presidents
Argentina
President: Alberto Fernandez
Birth: April 2, 1959
In Office Since: December 10, 2019
Political Party: Frente de Todos
Brazil
President: Jair Bolsonaro
Birth: March 21, 1955
In Office Since: January 1, 2019
Political Party: PSL
Colombia
President: Ivan Duque Marquez
Birth: August 1, 1976
In Office Since: August 7, 2018
Political Party: Centro Democratico
Chile
President: Sebastian Piñera E.
Birth: December 1, 1949
In Office Since: March 11, 2018
Political Party: Independent
Mexico
President: Andres Manuel Lopez O.
Birth: November 13, 1953
In Office Since: December 1, 2018
Political Party: Morena
Peru
President: Francisco Sagasti
Birth: October 10, 1944
In Office Since: November 17, 2020
Political Party: Partido Morado

Land Area
Source: The World Bank, 2018.
2,736,690
8,358,140
1,109,500
743,532
1,943,950
1,280,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Argentina Brazil Colombia Chile Mexico Peru
Note: Kilometers

Ease of Doing Business Index
126 124
67
59 60
76
0
20
40
60
80
100
120
140
Note: 1 = Most Business-friendly Regulations

Population Growth
1.0%
0.8%
1.4%
1.2%
1.1%
1.6%
0%
1%
1%
2%
2%
Note: Annual Percentage

Total Population
44,938.7
211,049.5
50,339.4
18,952.0
127,575.5
32,510.5
0
50,000
100,000
150,000
200,000
250,000
Note: (i) Thousands; (ii) Total Inhabitants

Urban Population
92%
87%
81%
88%
80% 78%
0%
20%
40%
60%
80%
100%
Note: Percentage of Total Population

Poverty Headcount Ratio
1.3%
4.4%
4.2%
0.3%
1.7%
2.7%
0%
1%
2%
3%
4%
5%
Source: The World Bank, 2017 - 2018.
Note: (i) At US$1.90 / Day; (ii) Percentage of Population

Exports of Goods and Services
17.4%
14.3%
15.8%
28.2%
38.8%
24.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Note: Percentage of GDP

Foreign Direct Investment
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
6,663
73,503
14,313
11,928
29,360
8,891
Note: (i) Net Inflows; (ii) BoP, Current Million US$

Gross Domestic Product
$445,445.2
$1,839,758.0
$323,615.9 $282,318.2
$1,268,870.5
$226,848.1
$0
$300,000
$600,000
$900,000
$1,200,000
$1,500,000
$1,800,000
$2,100,000
$2,400,000
Note: Millions, Current US$

GDP Per Capita
$23,040.3
$15,300.0 $15,643.7
$25,155.0
$20,582.4
$13,416.4
$0.0
$5,000.0
$10,000.0
$15,000.0
$20,000.0
$25,000.0
$30,000.0
Note: (i) PPP; (ii) Current International $

GDP Growth
-2.1%
1.1%
3.3%
1.1%
-0.1%
2.2%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Note: Annual Percentage

Gross Savings
15.8%
12.2%
15.7%
18.9%
23.7%
19.8%
0%
5%
10%
15%
20%
25%

Personal Remittances
$0.0
$10,000.0
$20,000.0
$30,000.0
$40,000.0
$528.3 $3,213.6
$6,761.9
$70.0
$39,021.8
$3,326.0
Note: (i) Received; (ii) Millions, Current US$

Total Reserves
$44,880.6
$356,886.4
$52,652.7
$40,655.5
$183,056.1
$67,711.5
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
$350,000.0
$400,000.0
Note: (i) Includes Gold; (ii) Millions, Current US$

Revenue
10.9%
29.7%
17.2%
22.0%
16.5% 16.6%
0%
5%
10%
15%
20%
25%
30%
Note: (i) Excluding Grants; (ii) Percentage of GDP

Government Expenditure on Education
5.5%
6.3%
4.5%
5.4%
4.5%
3.8%
0%
2%
4%
6%
8%

Labor Force
20,977.4
107,371.8
27,271.1
9,692.0
58,004.3
19,356.0
0
20,000
40,000
60,000
80,000
100,000
120,000
Note: Thousands

Labor Force (Female)
42.9% 43.6% 43.0% 42.3%
37.8%
45.7%
0%
10%
20%
30%
40%
50%
Note: Percentage of Total Labor Force

Unemployment
10.4%
12.0%
9.7%
7.1%
3.7%
3.2%
0%
3%
6%
9%
12%
15%
Note: (i) Percentage of Total Labor Force; (ii) Modeled ILO Estimate

Energy Use
2,030
1,496
724
2,006
1,537
790
0
500
1,000
1,500
2,000
2,500
Note: Kg of Oil Equivalent per Capita

Renewable Electricity Output
28.1%
74.0%
68.2%
43.6%
15.4%
52.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Note: Percentage of Total Electricity Output

Population Living in Slums
14.7%
16.3%
27.8%
8.8%
16.0%
33.1%
0%
10%
20%
30%
40%
Note: Percentage of Urban Population

External Debt Stocks
64.6%
31.8%
44.2%
38.5%
29.7%
0%
10%
20%
30%
40%
50%
60%
Note: Percentage of GNI

Bank Capital to Assets Ratio
13.5%
10.2%
17.0%
7.5%
11.0%
12.9%
0%
3%
6%
9%
12%
15%
18%
Note: Percentage

Bank Nonperforming Loans
to Total Gross Loans
5.7%
3.1%
4.2%
2.1% 2.1%
3.4%
0%
1%
2%
3%
4%
5%
6%
Note: Percentage

Deposit Interest Rate
47.3%
5.4% 4.5%
2.5% 3.5% 4.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Note: Percentage

Lending Interest Rate
67.3%
37.5%
11.8%
4.2%
8.5%
17.0%
0%
10%
20%
30%
40%
50%
60%
70%
Note: Percentage

Listed Domestic Companies
91
324
66
203
139
196
0
50
100
150
200
250
300
350
400
Note: Total

Market Capitalization of Listed Domestic
Companies
$39,393.54
$1,187,361.69
$132,040.28
$203,791.65
$413,618.82
$98,964.96
$0.0
$200,000.0
$400,000.0
$600,000.0
$800,000.0
$1,000,000.0
$1,200,000.0
Note: (i) Millions; (ii) Current US$

Strength of Legal Rights Index
2 2
11
4
10
7
0
2
4
6
8
10
12
Note: 0 = Weak to 12 = Strong

Military Expenditure
1.9%
3.9%
11.0%
7.2%
2.0%
5.4%
0%
2%
4%
6%
8%
10%
12%
14%
Note: Percentage of General Government Expenditure

We care about your business priorities.
Let’s talk!
E-mail: contacto@nuricumbo.com
Mobile/Whatsapp: + 52 (155) 5453 6309
Skype: nuricua
Twitter: @a_nuricumbo
Office: Montes Urales 424
Lomas de Chapultepec, CDMX
Please visit our website

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