Latin American economic overview - November 10, 2006

Brazil: GDP: latest forecasts point to a growth rate between 2.8% – 3.5% for 2006; the International Monetary Fund revised their estimate down to 3.2% Consumer Prices: + 3.7% in September (compared to September 2005), annual inflation rate fell to 3.4%, the lowest rate in 12 months Retail Sales: doubled in August compared to July; car sales went up by 27% in October Industrial Production: + 1.3% in September (compared to September 2005), lower than expected. A strike in the automobile industry in September is considered the main reason for the slowdown. Unemployment: 10% in September Current Account Balance: + $2.28 billion in September ($2.1 billion in August; $2.39 Sept 2005) Trade Surplus: + $3.92 billion in October – third monthly decline in a row. The strong currency and strong domestic demand are given as the prime reasons for the narrowing trade balance Currency: Reals 2.15 to US$1 as of November 8 (Reals 2.17 to US$1 a year ago) Crude Steel Production: 2.757 million mt in September (2.812 mt in August); year to date September 2006 is 3.7% behind the same period 2005 Argentina: Industrial Production: +6.6% September (compared to September 2005) GDP: The Central Bank now estimates the growth at 8.7% for 2006. Tax revenue reached a historical high of Pesos 13.36 billion (US$4.3 billion) in October Consumer Prices: went up 0.9% in October, +10.5% for the last twelve months through October Trade Balance: dropped to $895 million in September – 10.3% less than in September 2005; + $11.5 billion September 2005 – September 2006 Currency: Pesos 3.07 to US$1 as of November 8 (Pesos 2.97 to US$1 a year ago) Crude Steel Production: 481,000 mt (464,000 mt in August); year to date September 2006 is 6.0% ahead of the same period last year Chile: GDP: + 2.8% annual rate in September (from a year earlier), up from 2.7% in August. Central Bank's estimated growth for 2006 is 4.5% Consumer Prices: declined 0.3% in October. The annual inflation rate in October fell to 2.1%, the slowest pace in two years Industrial Production: - 4.4% in September, worst monthly decline since March 2005 Unemployment: fell to 7.9% in the period of July – September, lowest level since March Trade Balance: + $1.73 billion in October, lowest surplus in eight months; first ten months of 2006 saw a surplus of $18.9 billion, more than double than the same period last year Currency: Peso 525 to US$1 as of November 8 (Peso 533 to US$1 a year ago) Copper Price: US$3.29716 November 6 (US$1.93622 a year ago) Crude Steel production: 140,000 mt in September (142,000 mt in August), year to date September, the steel production is 3.2% ahead of last year's pace. Venezuela: General: Fueled by increased oil revenues, the country is experiencing a consumer boom. Strong demand, spot shortages, generous government spending on social causes and currency trading restrictions have pushed up inflationary tendencies. In the first ten months of 2006 the National Assembly has appropriated Bolivars 35.1 billion more than the originally budgeted Bolivars 87.0 billion for the year. Total spending has exceeded Bolivars 122.1 billion as per the end of October. By the end of the year, the budget could well be pushed up to Bolivars $130.0 billion. Did we mention that it is election season? GDP: + 9.2% Q2 (compared to Q2 2005); + 1.8% oil-related; + 9.9% non oil related Retail Sales: + 28% in July, the third straight month of 25%+ growth Inflation: + 15.5% in October (for the previous twelve months), the Central Bank expects inflation of 17% for 2006 Currency: Bolivars 2,989 to US$1 as of November 8 (Bolivars 2,959 to US$1 a year ago) Crude Steel Production: 440,000 mt (e) in September (454,000 mt in August); year to date September the steel production is 5.4% ahead of last year's pace. Venezuela's biggest steel mill, Sidor (part of Ternium), has had a work to rule action (“Operation Turtle”) for almost six weeks. Since last week this action has turned into a full fledged work stoppage.