Januar y , 201 5
Panor amaLATAM: Gr owt hpi cki ngupat count r i esofPaci fic ByPat r i ci aKr aus e Economi s t , Lat am
CONTENTS
Par tI oeconomi ccur r ent 02 Macr envi r onment
owt hs l owi ngdownandt wo 03 Gr di ffer enteconomi cdi r ect i ons
nt er vi ew wi t hJonat hanHeat h 05I Economi s tandpr of es s orat t heUni v er s i da dAut ónoma Met r opol i t a naUAM
Par tI I orBar omet er 07 Sect
Par tI I I
Thr eedecadesagoLat i nAmer i caus edt obeknownbynegat i vet er mss uchas di ct at or s hi p,debtcr i s esandhi ghi nflat i on.Ther egi on´ sGDPi ncr eas edbyan annualaver ageofonl y1 . 5% i nt he1 980s .Onedecadel at ert her at er os et o2. 4% and final l yachi eved 4. 2% bet ween2003and 201 3.Overt heyear sLat am has begunt obeassoci at ed wi t heconomi cgr owt h,new mi ddl ecl ass,pover t y r educt i onandcont r ol l edi nflat i on. Des pi t e gener ali mpr ovement si nt he r egi on,gr owt h has s ur pr i s ed on t he downs i dei nal mos tal lcount r i esi n201 4( s eechar t1 ) .W hyand whatar et he mos ti mpact eds ect or s ?Thi ss ubj ectwi l lbeaddr es s edi nt heLat am Panor ama. I nt hi sedi t i onwewi l lf ocusont wocount r i esoft hePaci ficAl l i ance:Mexi coand Per u.Mexi co s eemst o have a pos i t i ve out l ook i nt he medi um t er m,due t o r ecents t r uct ur alr ef or mspr omot edbyi t sgover nment . Thi spanor amaexpl ai ns why. Andt hePer u’ scas ei spuzzl i ngaswel l : t hecount r y’ smedi umt er m pr os pect s ar ever yf avor abl e( Per uhasbeeni dent i fied asoneoft he1 0“ new emer gi ng mar ket s ”by Cof ace ear l i ert hi syear ) ,butt he gr owt h moment um hasbeen f adi ngovert hepas tmont hsaswel l . W ewi l li ni t i al l ydi s cus st her egi on´ smacr oeconomi ccur r entenvi r onmentand hi ghl i ghtont het wocount r i es ,bot hf r om amacr oeconomi cs t andpoi ntanda sect orone.Secondl yweassesst heext entoft hei mpactonsect or soft hi s sl uggi shGDP gr owt hi nt her egi on.Todoso,wedet ai lourLat am sect or bar omet er ,whi chr eveal sfinanci alper f or manceofcompani esi ndi ffer enti ndus t r i es coupl ed wi t h Cof ace paymentexper i ence.The t hi r d par twi l lbe f ocus ed on count r i ess ens i t i vei ndus t r i es .
or s 09Sect
Par tI V
CHART1
us i on 1 1 Concl
1 . 3%
Sour ce: Cof ace
2%
Par tI
Macr oeconomi ccur r entenvi r onment Cof acepr oducescount r yr i s kas s es s mentf or1 77count r i es ,bas edont heaver ager i s kofpaymentdef aul t sbycompani esi n agi vencount r y.Thi seval uat i oncombi neseconomi candpol i t i calpr ospect soft hecount r y,t hei nsur ancepayment exper i enceandbus i nes scl i mat eas s es s ment .Taki ngi nt oaccountt het i mel i nef r om 2003t oSept ember201 4f ort heei ght mai neconomi esi nLat am ( i nt er msofGDP) ,wenot i cei mpr ovementi n5/8i nt hel as tdecade( t abl e1 ) .
TABLE1
Eval uat i onhas7gr ades :A1 ,A2,A3,A4,B,C andD,bei ngA1t hebes tgr adeandD t hewor s tone.
Venezuel ai sanegat i veexampl eandi t sas s es s menti snotexpect edt or ever ti nt henearf ut ur e,asi thasbeen f aci ngr ampanti nflat i onands hor t ages , l ackofi nt er nat i onalr es er vesands i gni ficants t at ei nt er vent i oni s m. Chi l e hasmai nt ai nedi t sel fst abl easanA2,t heLat i nAmer i caout l i er .Mexi coal sor emai nswi t ht hesamegr ade,but r epor t edvol at i l i t y.Thedowngr adei n2009wasas s oci at edwi t hU. S.s ubpr i memor t gagecr i s i sandi t seffect overt hedowns t ai r snei ghbor .Over80% ofMexi co´sexpor t sar edes t i nedt oUSA,s oi twashar dl yhi tatt hat t i me. Br azi lobs er vedas ees aw behavi or , buti sbet t erpos i t i onedt henonedecadeago. Thecount r yhol dsver ys t r ong i nt er nat i onalr es er vespos i t i on,at t r act sexpr es s i ve amount soff or ei gn di r ecti nves t ment s ,buti nflat i on has begunt opr essur eagai n,fiscalbal ancehasdet er i or at edandact i vi t yhasst agnat ed.Per uand Col ombi a i mpr ovedsi gni ficant l yi nt hel astdecade.Bot hr epor t edst r onggr owt hr at es,i ncr easedi nvest ment s,r educed i nflat i onand wer eabl et o dealwi t hdomes t i ci s s ue.I nt hefir s tcas egover nmenthasbeencombat i ng i l l egal mi ni ngwhi l et hes econdhasbeennegot i at i ngwi t hFARC.Ar gent i nawentf r om aDt oaC, butcur r entenvi r onment i sver ysensi t i ve.Count r yr emai nsi nt echni caldef aul t ,wi t hver yl i mi t edi nt er nat i onalr eser vesandi ncr easi ng i nflat i on.Fi nal l yEcuadorwasabl et oi mpr ovei t ssi t uat i onaf t ert hedef aul ti n2008,yetdependenceonoi l r evenuer emai nhi gh,s t at ei nt er vent i oni s mi ss i gni ficantandr es t r i ct i onoveri mpor t ss t i l lr i s es .
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Gr owt hs l owi ngdownand t wodi ffer enteconomi cdi r ect i ons Lat i nAmer i cai samaj orpr oducerofcommodi t i esand a good par toft hes t r ong per f or manceobs er ved i nr ecent per i od wast hankst ot he r api d gr owt hi n Chi na,whi ch pr essur ed t hei nt er nat i onalpr i cesup.TheAsi angi ant demanded hi ghvol umesofcopperf r om Chi l eand Per u, i r onor ef r om Br azi lands oyaf r om Ar gent i na.Count r i esi n t her egi ons t ar t edt or ecor dhi ght r ades ur pl us es ,butt hi s bonanzaper i odi sover .Af t ermanyyear sgr owi ngar ound 1 0% ayear ,Chi nes eact i vi t yhasl os tr hyt hm.Fori ns t ance, Cof aceexpect sChi nes eeconomyt or epor tagr owt h of 7. 4%i n201 4andof7%i n201 5. Asacons equencecommodi t i es ’ pr i cess t ar t edt of al l ,i mpact i ngLat am´sexpans i onr at es . Ther egi on´sGDPi sexpect edt ogr ow by1 . 3% i n201 4and by2% i n201 5,muchl owert hant hepr evi ousyear s . Theweakerf or ecas tal s or eflect st hel owerwor l dact i vi t y andt hel ackofi nves t ment s .I nf r as t r uct ur ei sakeyi s s uei n t her egi onandcount r i esasawhol edi dnott akeadvant age oft heyear sofst r engt henedt er msoft r adet opr omot e r ef or ms .Accor di ng t ot he i nf r as t r uct ur ei ndex of t he W or l d Economi c For um ( W EF) t he best posi t i oned count r yi nLat i nAmer i ca,Chi l e,occupi esonl yt he49th pos i t i on of1 44 count r i es . Al lot hercount r i es s t and at weakerpos i t i ons( char t2) .
gr oup,compos ed by count r i esoft he At l ant i c,mi s t r us t gl obal i zat i onandi nt hem modelt hes t at ehasas i gni ficant r ol ei nt heeconomy. I ndi ffer entpr opor t i onswecanment i on Venezuel a,Ar gent i naand Br azi l .Thefir s tgr oup cr eat ed t hePaci ficAl l i anceandhasbeent r yi ngt oi mpr ovet r ade par t ner s hi ps out s i de t he cont i nent , whi l et he s econd r emai n bas i cal l yt r apped t ot he Mer cos ul .I ti scer t ai nl y di fficul tt ocompar eBr azi lwi t hVenezuel a.I nflat i oni nt he fir s tcount r yi smuchl owert hani nt hel at erone,buti ti s peeki ng up i nr ecentyear samong ot herr eas onsduet o gover nment ´sl ack ofcommi t mentwi t h fis calpol i cy.I n addi t i onfixedpr i ceshavebeenus edasat oolt oar t i fici al l y cont r oli nflat i on,unbal anci ngr el at i vepr i ces . W hi chwayt of ace?Thefir stmodelseemst obemor e s ucces s f ul , t aki ngi nt oaccountt her ecentr es ul t sachi eved i nbot hgr oups .I nas cenar i ooff r eet r ade,count r i est end t of ocusont hegoodsi nwhi cht heyhol dcompar at i ve advant age,i ncr eas i ng pr oduct i vi t ygai ns .Openeconomi es ar eal s o mor el i kel yt o at t r acti nves t ment s . Cons i der i ng act i vi t yi n201 3and Cof ace´sf or ecas tf or201 4 and 201 5, GDP hasbeen i ncr eas i ng atahi gherpacei nt hePaci fic s i de( char t3) .
CHART3 CHART2
Sour ce:Wor l dEconomi cFor um
Sour ce:Cof ace
Dur i ngt hephas eofr api dgr owt hnotal lcount r i esr epor t ed t he s ame behavi orand r ecent l ys ome agent sbegan t wos pl i tt her egi oni nt wogener al i s t sgr oups .Onones i de t hecount r i esoft hePaci fic:Mexi co,Chi l e,Col ombi aand Per udef endi ngf r eet r adeandf r eemar ket s.Theot her
I nBr azi lact i vi t ys houl dr emai nweaki n201 5,asar es ul tof l ack ofi nves t ment sand oft he adj us t ment si nr epr es s ed pr i ces( oi landener gyt ar i ffs ) .I nt er es tr at ess houl di ncr eas e
3
i nor dert ocont ai nal r eadyhi ghi nflat i on. I n Ar gent i naeconomi ccont r act i on and i nt er nat i onal r eser vesshor t age wi l lr emai n.Pr esi dent i alel ect i onswi l l t akepl acei nt heendof201 5,sonobi gi mpr ovement sar e expect edi nt heshor t /medi um t er m. Mexi co hasaser i ousofposi t i vesr ef or msgoi ng on,such ast heopennes soft heoi ls egment ,t heendoft het el ecom monopol y,t her educt i oni nl abormar ketbur eaucr acyand aver yaggr es s i vei nf r as t r uct ur ei nves t mentpl an.Tr ans par ency andt heeffici encyi ncr eat i ngt her ul esar e keyt odet er mi ne t heat t r act i venesst oi nvest or s. Act i vi t yi n Per ui sexpect ed t or ecoverr hyt hm i n 201 5, based on a par t i alr ecover y oft he mi ni ng segment . Despi t et hel oweri nt er nat i onalpr i ces,t hesegmenti snot yetbenefit i ng f r om t he st r ong i nvest ment soft he l at t er year s . Cent r al Bankr educedt hebanks ´r es er vesr equi r ement s ( t o1 0% f r om 1 0. 5%) .
gr owt h wasr epor t ed i nt he1 H201 4( +1 . 7% compar ed wi t h t hes ameper i odof201 3) .Ther es ul twasmos t l yas s oci at ed wi t ht hei mpactoft het axi ncr eas esi nJanuar y201 4andby as t r ongwi nt ert hathi tt heUSA ( about80% ofexpor t sgoes t ot henor t her nnei ghbor )i nt hefir s tquar t erof201 4. Act i vi t yi mpr oved i nt he t hi r d quar t erof201 4 YoY ( 2. 2% agai ns t1 . 6% i n2Q201 4) ,butr es ul tcamebel ow agent sf or ecas t . I ndus t r i alpr oduct i oni ncr eas edbyonl y2% YoY,mai nl ydue t oadr opi nmi ni ngact i vi t yas s oci at edwi t hadecr eas ei noi l pr oduct i on.I n count er par tcons t r uct i on r epor t ed as t r ong r ecover y( +4%YoY) ,af t eral ongt ur moi lper i od.Af t eras l i m gr owt hof1 . 3% r epor t edi n201 3,Cof aceexpect sGDPt o i ncr eas eby2. 2% i n201 4andt ogetf ur t herr hyt hm i n201 5, aswebegi nt of eel t hefir s teffect soft heoi l r ef or m. Thefir s t r ound ofbi dsi ss chedul ed t os t ar ti n Febr uar y 201 5 and fini s h by Sept ember 201 5.Gover nment wi l lt ender 1 69 bl ockscover i ng28, 500s quar eki l omet er s .
Chi l ewi l lr epor ti mpr ovementi nact i vi t yi n201 5,duet oa hi ghergl obalgr owt handi nr esponset ol ooserfiscaland monet ar y pol i ci es.The publ i c 201 5 budgetannounced wor kswi t h a hi gh of9. 8% i n expenses(t he hi ghest i ncr easesi nce2009)and Cent r alBankcuti nt er estr at es i n25b.i nOct ober201 4( now i n3% a. y. ) .
Event hought her ef or ms´out l ooki sposi t i ve,Pr esi dent Enr i quePeñaNi et ohasbeenf aci nghi sgover nment ´smos t ser i ouscr i si ssi ncehet ookofficei nDecember201 2.On Sept ember26 201 4 43 t r ai nee t eacher s oft he s out her n s t at e ofGuer r er o di s appear ed. Accor di ng t o Mexi co´s at t or neygener al ,bas edont het es t i monyoft hr eedet ai nees , t heywer eki dnapped byl ocalpol i cef ol l owi ng anor der ofI gual a´smayorandt henmur der edbydr ugt r afficker s .
I n Col ombi a GDP hasbeen gr owi ng atr obustr at es, out per f or mi ngcount r i esi nt her egi on.Themai nsensi t i ve segment s ar e manuf act ur i ng and ext r act i ve i ndust r i es. Despi t et hatr et ai lsal esr emai n st r ong,t hankst ot he macr oeconomi c st abl e envi r onment and t oi ncr easi ng cr edi tavai l abi l i t y.Gover nmentkeepspus hi ng i nves t ment s upi ni nf r ast r uct ur e,cont r i but i ngt ost r ongi ncr easei nt he const r uct i oni ndust r yt oo.
Thi sepi s odehasr ai s edt wos ens i t i vepoi nt s :Thecount r y´s weakr ul eofl aw andgover nment ´si neffici encyi nt ackl i ng vi ol ence and i mpuni t y.Pr es i dent popul ar i t y´s decl i ned s i ncet henand ot hernegat i veevent sf ur t hercont r i but et o t hedet er i or at i onofNi et o´si mage.Thi smayj eopar di zet he s uppor toff or ei gneri nves t or s , r ef or mswi l lneverachi evei t s f ul lpot ent i ali nanenvi r onmentwi t houtami ni mum r ul eof l aw.
Ecuadorl ostmoment um i nt he fir stquar t eroft he year andi snotexpect edt or et ur ngr owi ngatt hesamer hyt hm of201 3.Af t erahi ghof4. 5% r epor t edi nt hepr evi ousyear , act i vi t yshoul d expand by3. 8% i n 201 4 and i n 201 5.The economy has al so been dependi ng on oi lr evenue,t he mai nsour ceoft axesi nt hecount r y.Ther ecentdecr ease i noi lpr i cesmayt hr eat engover nment ´ saggr es s i veexpens es i n heal t hcar eand educat i on r ef or ms .sand can bewat ch l i st ed.
I nflat i ons t andsat4. 08% i n201 4,abovet heCent r alBank´s t ar getr ange of24%. Par toft he r ecenti ncr ease i s expl ai nedbyt het axhi kesandpr es s ur eoverpr i cesshoul d r emai n al ong 201 5,f uel l ed by hi gheragr i cul t ur alpr i ces , pas s t hr ough cur r ency effect sand by wage adj us t ment s . Cent r alBank´sr ef er ence i nt er es tr at ess t andsat3%,t he l owes tl eveli nr ecor d.Hi keswi l lpr obabl y occuraf t ert he fir s thal fof201 5, ast heUSFedi sexpect edt odel i veri t sfir s t i ncr eas ei ni nt er es tr at esi nt hes econdquar t erof201 5.
Mexi co
TABLE2
Si ncet hesi gnat ur eoft hePact oporMexi coi nDecember 201 2,anagr eements t r uckbyt het hr eemai npol i t i calpar t i es, t he count r y wi t nessed a var i et y ofr ef or ms.Peña Ni et o waseffici enti n get t i ng cr osspar t y suppor tand bi g i mpr ovement swer edonei n 201 3.Gover nmentwasabl e t ogetappr ovalf oral andmar kener gyr ef or m,br i ngi ngan endt oa75yearmonopol yofst at eownedPemexandby openi ng t heoi land gasi ndust r i est o pr i vat ei nvest ment , f r eedupt hel abormar ketandhasi nt r oducedcompet i t i on t ot het el ecom sect or . Despi t et heposi t i veeconomi cenvi r onment ,sl uggi sh
Pctofchangei nr ealt er ms ,except( 1 )% ofGDPand( 2)% ofl aborf or ce Sour ce:I negi ,Cof ace,I MFandOxf or dEconomi cs
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I nt er v i ew Jonat hanHeat h
Economi s tandpr of es s oratt heUni ver s i dadAut ónomaMet r opol i t anaUAM
Mexi can Cent r alBank expect sGDP t oi ncr eas e by 3. 7% i n 201 5.Do you t hi nkt hi sr at ei sachi evabl e? W hi chcomponent swi l lpus hupact i vi t y? TheFeder alGover nmenthassetpr oj ect edgr owt hf or 201 5 at3. 7%,sl i ght l y bel ow t he consensus f or ecast comi ng f r om financi ali nst i t ut i onsand ot heranal yst s, whi l emanyt hi nkt hatt heMexi caneconomycaneven gr ow above 4. 0%.Mostoft he f act or st hatl i mi t ed gr owt ht o1 . 1 %i n201 3andhavehel di tbel ow 2% i nt he fir sthal fof201 4havebeenover come.Mosti mpor t ant , nonoi lexpor tgr owt hhasbeenpi cki ngupi nr esponse t o an i mpr ovi ng US economy( t heI MF i sf or ecast i ng US gr owt habovepot ent i alf ort her emai ni ng of201 4 and 201 5) .Pr i vat ei nvest menti sst ar t i ng t or espond and shoul d sl owl yi mpr ove wi t h new oppor t uni t i es ar i si ng f r om r ef or ms.Househol d consumpt i on i sal so gr owi ng,al bei tatast i l lsl ow pace.Fi nal l y,gover nment s pendi ng,es peci al l yi nves t ment ,s houl ds t ar ti mpact i ng gr owt h.
Theener gyr ef or m wasal andmar k.How l ong wi l li t t aket of eelt hepos i t i veeffect sovert heeconomy? W hi char et hemai nchal l engest obet ackl ed? I nvest mentout l aysshoul d st ar tpi cki ng up goi ng i nt o 201 5,butmostoft heposi t i veeffect sshoul dbef el tas oft he second hal foft he Pena Ni et o admi ni st r at i on ( 201 6201 8) .Themai nchal l engeswi l lbei nt hes ol i ci t at i on and cont r act awar di ng pr ocesses,whi ch wi l lmost l i kel ybemuchl esst r anspar entt hanpr omi sed.W eak r ul eofl aw andsecur i t ychal l engeswi l lal sobeamaj or hur dl e.
Cons t r uct i onwashar dl yhi ti n201 3,duet onew r ul es i nhous i ngpol i cy,dr opi npubl i cwor ksanddel aysi n i nf r as t r uct ur e devel opment .Fi gur es of201 4s how t hatt hi si ndust r yr emai nssensi t i ve,butl astJune i ndus t r i alpr oduct i oni ndexf orcons t r uct i onexpanded f ort hefir s tt i mei n1 9mont hs .Doyout hi nkt hi si sa s i gnalofanas centr ecover y? Const r uct i on act i vi t y mustbe br oken down i nt oi t s component st o bet t erunder st and whati sgoi ng one. Resi dent i alconst r uct i onhasbeengr owi ng ( atasl ow pace)si ncet hebegi nni ngoft hi syearandshoul dpi ck upsl owl yt hr oughoutt henextquar t er s.Never t hel ess,
i twi l lbehar dt ovi sual i zear et ur nt opastdynami cs because many oft he bi g devel oper sl ack r esour ces. Thecomponentt hathasdel ayedanover al lr ecover yi n const r uct i on i spubl i c wor ksand i nf r ast r uct ur e,asi t hasr egi st er edanegat i vet r endsi ncet hest ar tof201 0. Theamountofr esour ces,however ,whi cht heFeder al Gover nmenthaspr omi sedi nt hi sdi r ect i on, shoul dt ur n t he t r end upwar d soon.The t hi r d componentof const r uct i on,speci al i zed pr oj ect s,hasbeen gr owi ng si ncet heend ofl astyear ,butr epr esent sonl yasmal l per cent ageoft heover al lconst r uct i oni ndust r y.
The penet r at i on ofl oansi n Mexi co i sone oft he l owes ti n t he r egi on. I s t he financi al r ef or m l aunchedr ecent l yl aunchedl i kel yt or ever tt hi ss cenar i o?How do you s ee t he cr edi tper f or mance i n t henearf ut ur e? Cr edi tdeepeni ngshoul dcont i nuet oi mpr oveovert he year s,ascr edi tf r om t he financi alsyst em t ot he nonfinanci alpr i vat es ect ors houl d gr ow s ys t emat i cal l y aboveGDP gr owt h.I ti snotcl ear ,however ,t hatt he new financi all awsandr ef or m wi l lcr eat et hei ncent i ves t oaccel er at et hi sgr owt hi nasi gni ficantmanner .The maj orhur dl ess t i l lf aci ngcr edi tgr owt har eweakpr oper t y r i ght sand quest i onabl er ul eofl aw i nmanyar eas.At t hesamet i me,t hegover nment ’ sdebti ncr easewi l lbe cr owdi ngoutt hepr i vat esect or .
I n Apr i l201 4 Pr es i dent Enr i que Peña Ni et o announcedt heNat i onalI nf r as t r uct ur ePl an,whi chexpect st or ai s e7 t r i l l i on pes os( ar ound 590 bi l l i on USD)f r om 201 4 unt i l201 8.Thi spl ani ncl udes743 pr oj ect si n ar eas ,s uch asener gy,communi cat i on and t r ans por t . Do you t hi nkt hi st ar geti sachi evabl e? The t ar geti sachi evabl e and t he gover nmentwi l lbe pr i or i t i zi ng t hi s Pl an t hr oughout t he r est of Pena Ni et o’ sadmi ni st r at i on.Themai ni ssues,however ,ar e effici ency and efficacy ( pr oduct i vi t y and usef ul ness) . Many oft he pr oj ect s may notr eal l y cont r i but et o f ut ur egr owt hi neconomi cact i vi t y,whi l eover s pendi ng and cor r upt i on may pr ove t o be maj or st umbl i ng bl ocks.
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Per u Dur i ngt hel as tyear sPer uout per f or medi t sLat i nAmer i canpeer s ,butGDPhass l oweddowni n201 4.GDPgr ew by3. 8% i n 1 2mont hsaccumul at ed unt i lt he3Q201 4.Per ui samaj orpr oducerand expor t erofmi ner alcommodi t i es ,s uch asgol d, copperands i l ver .Ar ound70% oft hecount r y´sexpor t sar ecommodi t i esandChi nai st hemai ndes t i ny.Thel owerChi nes e gr owt hr hyt hm andi t si mpactoveri nt er nat i onalpr i ceswer ef el ti nPer u´seconomy.I ti swor t hnot i ngt hatmi ni ngs egment wasal s ohi tbyt hecombatofi l l egalact i vi t y,pr ot es t sagai ns tt heenvi r onment aleffect s ,del aysi nTor omochomi newor ks andt heby Yanacocha´spoorgol dpr oduct i on. Tr adeBal ancei snott heonl yi mpact edchannel , i nves t mentaswel li shi ghl ycor r el at edwi t ht er msoft r ade. Tot ali nves t ment s l umped by3. 4% year soveryeari nt het hi r d quar t erof201 4,achi evi ng acont r act i onof0. 6% i n1 2mont hsaccumul at ed. Publ i ci nvest ment shavebeeni mpact edbyser i ousi mpl ement at i onpr obl emsi nl ocalandr egi onalgover nment s.Pr i vat e i nves t ment shaveal s of al l en,duet oabus i nes sconfidences l ow r ecover y. I nt hi smanner ,Cof aceexpect sGDPt os hi f tf r om a5. 8% gr owt hi n201 3t o3. 6% i n201 4.Des pi t et hes l owdown,fis calfigur es r emai ns oundandt heCent r alBankmayr educei nt er es tr at esf r om cur r ent3. 5%,i nor dert oboos teconomy.Act i vi t ys houl d r ecoverpacei n201 5, wi t hr eboundofmi ni ngpr oduct i on, s t i l l l ow unempl oymentr at e( 5. 7% i nOct ober201 4)ands ol i dcr edi t gr owt h( +1 7. 1 %i n1 2mont hsunt i lt hes econdquar t er201 4) .Cons t r uct i oni sexpect edt or ecoverr hyt hm,asi nf r as t r uct ur e get smoment um andr et ai lands er vi cess egment swi l lmai nt ai ni t ss t r ongper f or mance.
TABLE3
Pctofchangei nr ealt er ms ,except( 1 )% ofGDPand( 2)% ofl aborf or ce Sour ce:I nei , Cof ace,I MFandOxf or dEconomi cs ,EI U
6
Par tI I
Sect orBar omet er Cof ace´ss ect orbar omet err eveal sfinanci alper f or manceofcompani esi ndi ffer enti ndus t r i escoupl edwi t hCof acepayment exper i ence.I nLat am t hegener alout l ooks t andsbet weenmedi um and hi ghr i s ks .Ther es ul ti sal s o achi eved bas ed ona wei ght edaver ageoft hecount r i es´GDPs.I ti swor t hnot i ngt hatt hefivemai neconomi esar er espect i vel yBr azi l ,Mexi co, Ar gent i na,Col ombi aandChi l e.Toget hert heyr epr es ent83% oft her egi on’ sGDP.I nt hi smannercount r i est hatar egr owi ng atal owerr at e( Br azi l )orar eevenexpect edt ocont r actt hi syear ,s uchasAr gent i na,haveas i gni ficantr at ei neachr egi onal s ect orbar omet er . I nacont extofs l owerr egi onalGDPgr owt h,manys ect or sr epor t edadet er i or at i onofi t sr i s kper cept i on.Bel ow wewi l ldi s cus s t heout l ookofeachs egment .
Agr of ood:medi um r i sk
Ret ai l :medi um r i sk
I n Br azi lt heagr os egmenti sexpect ed t o achi ever ecor d cr op and r ur alcr edi tsuppl yhasi ncr eased.However , pr ofit abi l i t y has been i mpact ed by l ower i nt er nat i onal pr i ces , hi gheri nt er es tr at esandcos t s( s i gni ficantdependence oni mpor t ed f er t i l i zer s) .I nChi l e,Ecuadorand Per ut he s cenar i oi sal s oofmedi um r i s k.
Scenar i odi ver gesamongt her egi on.I nBr azi lr i s kr emai nat medi um l evel ,ass al ess l oweddownduet ol owergr owt hi n r ealwagesand cr edi tcondi t i on hasdet er i or at ed.I n Ar gent i na cur r entenvi r onmenti sal s o ofmedi um r i s k,i n accor dance wi t h economi cr eces s i on and t he effect s ofhi gh i nflat i on overr ealdi s pos abl ei ncome.I nMexi co,Per uand Col ombi a r i s ks t andsatmoder at el evel .Thefir s toner epor t edaweak fir s thal fof201 4,butact i vi t yi sexpect edt ogetmoment um ascons umer sgetadapt edt ot het axesi mpl ement edi nl at e Januar y.I nt heot hert wor emai ni ngcount r i esr et ai ls egment havegood oppor t uni t i es,asar esul tofr api d gr owt h,decl i ni ng unempl oymentr at esandhi gherr ealwages .
I n count er par tper spect i vear eofhi gh r i ski n Mexi co, Ar gent i naand Col ombi a.Mexi can f ood segmentwas i mpact ed by hi ghert axesi mpl ement ed i n Januar y 201 4. For Ar gent i na agr i cul t ur ei s a cr uci als our ce ofdol l ar s ( es peci al l ys oya) .Manyf ar mer spr ef ert odel aycr ops al es , duet ol oweri nt er nat i onalpr i cesand ast heyexpecthi gh deval uat i onoft heAr gent i neanPes o( i naddi t i ont ot heone ofendJanuar y201 4) .Theenact mentoft heSuppl yLaw i n Sept ember201 4, whi chal l owst hegover nmentt oi nt er vene i nt hepr i ci ngandout putl evel sofl ar gecompani es ,s houl d penal i zet hos ewhoaccumul at er aw mat er i al sorpr oduct s .
Text i l ecl ot hi ng:hi ghr i sk Ri s ki sathi gh l eveli n al mos tt he whol er egi on.The As i an r el at i vel ycheap t i ssuei sat hr eatt ol ocali ndust r i esand
7
i mpor t shasbeeni ncr eas i ng,wi t houtr ebounds i gnal .Lack ofcompet i t i venes si smai nl yexpl ai nedbyhi ghl aborcos t , fier cecompet i t i on,hi ght axbur denand weakfinanci al admi ni s t r at i on ( many compani es ar es ubj ectt of ami l i ar management ) .
Met al s:hi ghr i sk Chi nai sr es pons i bl ef or50% ofwor l d´ st ot al s t eel pr oduct i on and cons umpt i on,s oi t sr epr es ent at i venes st o det er mi ne i nt er nat i onalpr i cei sver ymeani ngf ul .ManyChi nese s t eel maker s ar es t at eowned and t he deci s i on ofhow much t o pr oducedoesnotnecessar i l yconnect ed t o economi cr eas ons ,i mpl yi ngi nwor l ds t eelovers uppl yand s ol owerpr i ces .I nBr azi lt hes egmentwasal s oi mpact ed byt hel owerdemandofi t smai ncons umer s :aut omot i ve, cons t r uct i onandcapi t algoodsi ndus t r i es . I nAr gent i nat he sensi t i vescenar i o ofi t saut omobi l ei ndust r yhasal so i mpact ed t he met ali ndus t r y.The s cenar i oi sofmedi um r i ski nMexi co,Chi l e,and Ecuador .I nMexi cosect ori s benefit i ngf r om t hes t r ongper f or manceoft heaut omobi l e andmanuf act ur i ngs egment s .I nt henearf ut ur et hel andmar k oi lr ef or m wi l li ncr eas et hes t eeldemandi nt hecount r y.
Const r uct i on:hi ghr i sk
I nBr azi lt heper s pect i vei snegat i vet ot hecor por at es egment , due t o over s uppl y ofr eales t at er el eas esagai ns tweak demand as s oci at ed wi t hs l owdown i n economi cact i vi t y. For homebui l der ’ ss cenar i o i ss l i ght bet t er , due t o count r y´s hous i ng defici t and s t r ong mor t gage cr edi t suppl y.Theyearof201 4wi l lbemar kedbysl owdowni n i nf r ast r uct ur ei nvest ment s,whi ch i sver ycommon i n pr esi dent i alel ect i on year s.I nt he t hr ee fir stquar t er s of201 4t he s egmentdecr eas ed by5. 1 % compar ed wi t h t hes ameper i od of201 3.Out l ooki nChi l e,Ar gent i naand Col ombi aar eal sosensi t i ve.Thefir stt wocasescanbe expl ai ned by s har p decr eas ei n count r y´s i nves t ment s r at es .Thel at t eri ncr eased by 3. 7% i nt he t hr ee fir st quar t er sof201 4,butl at epayment shavebeenr epor t ed. I nMexi cosegmentunder wentdi fficul t i esi n201 3( see det ai l si npar t3) ,duet ot henew r ul esf orhous i ngmar ket , economi csl owdown,dr op i n publ i cwor ks,del aysi n i nf r as t r uct ur edevel opmentand i ngover nment ´ spayment . I n201 4 act i vi t yr emai nweak,buti t ’ sexpect ed t o get moment um wi t ht he 201 4201 8 Nat i onalI nf r as t r uct ur e Pl an announced i n Apr i l201 4.Gover nmentexpect st o r eachMXN 7. 7t r i l l i onpesos( 568biUSD)i npubl i cand pr i vat ei nves t ment s .
Aut omot i ve:medi um r i sk
Chemi cal :hi ghr i sk
Al ong t her egi on r i s ki sathi gh l eveli n Br azi l ,Ar gent i na andChi l e.Af t ermanyyear sofs ol i dgr owt h,Br azi l i anaut o i ndus t r yr epor t ed a di fficul t201 4.Pr oduct i on decr eas ed by1 5. 3% and s al escont r act ed by7. 1 %i n 201 4.Themai n r eas on ar et he l owereconomi c act i vi t y,det er i or at ed cr edi tcondi t i ons , new s ecur i t yr ul esandt axhi kesi mpl ement ed i n Januar y 201 4.Br azi l i an and Ar gent i nean aut o mar ket ar e cl os el yl i nked t o each ot her ,so t he cr i si st hatt he l at t eronehasbeenexper i enced( r ecessi onandl ackof i nt er nat i onalr es er ves )hasal s oi mpact ed t hefir s tone.I n Chi l et hes cenar i oi sal s o chal l engi ng.Sal es decr eased by 1 0. 8% f r om Januar yt o November201 4,ascons umer spendi ng has sof t ened cons i der abl yi nr ecentmont hs . Confidencei ndexesar es l owi ngdownandi nves t ment sar e wani ng,due t ol owercopperi nt er nat i onalpr i ces and t het axr ef or mt hati sexpect edt ot akepl acei nt henear f ut ur e.
Ther egi onasawhol ef acesl ackofcompet i t i venes sduet o r el at i vel yhi gh cos t s .I n Br azi lf ori ns t ance,chemi calt r ade defici ts t andsat31 . 5bi l l i onUSD i n1 2mont hsunt i lOct ober 201 4.Not wi t hs t andi ng,t he s hal e gas expl oi t at i on by t he USA hasal s or evol ut i oni zedt hegl obalcos tchai n. Count r i es i n Lat am,such asBr azi l ,Mexi co and Ar gent i na,hol d r es er vesoft hi sgas ,butpr oduct i onhasnotbegunyet .The Mexi canener gys houl dpos i t i vel yi mpactt hei rl ocali ndus t r y i nt hemedi um t er m.Des pi t et hegener als ens i t i veout l ook f orLat am´schemi cali ndust r y,t her ecentdr op on oi l i nt er nat i onal pr i ces may pos i t i vel y cont r i but e r educe napht a´scos tus edasr aw mat er i ali nt hei ndus t r y.
On t heot herdi r ect i on,r i s ki smoder at ei n Mexi co.Si nce t he i mpl ement at i on ofNAFTA i n1 994,Mexi can´s aut o pr oduct i on hast aken abi gl eap and becameexpor t or i ent ed.I thasbenefit ed f r om i t spr oxi mi t yt ot he USA and t he cheap l aborf or ce,whi ch makest he count r y ver y compet i t i ve.Many as s embl i es have been openi ng new pl ant si nt hecount r y.Pr oduct i oni ncr eas ed by7. 5% and s al esexpanded by 4. 5% i nt he fir s tni ne mont hsof 201 4compar edwi t ht hes ameper i odof201 3.Act i vi t yal s o s l owed down i n Per ui n 201 4,af t ers t r ong gr owt hi nt he l as tyear s .Del aysi ni nves t ment scan be poi nt ed ast he mai nr eas onandi ts houl dr eboundi n201 5.
Phar maceut i cal s:moder at er i sk Des pi t et he l owergr owt h ofdi s pos abl ei ncome i n many count r i esi nr ecentper i od,i thasi mpr oved i fwecons i der the l astdecade.These have contri buted to boost phar maceut i cali ndus t r yi nLat am.I nmos toft hecount r i es , I ndus t r yhasbeeni ncr eas i ngi namuchhi gherr at et hant he gener ali ndus t r y.
8
Par tI I I
Sect or s I nt hi ss ect i onwewi l lf ocusont wos egment soft heMexi canandPer uvi aneconomi es .I nt hi sedi t i ont hei ndus t r i esar econs t r uct i onf orMexi coandmi ni ngf orPer u.Thefir s tf acedt ur moi li n201 3andnow i ss t ar t i ngt or ecover .Thes econdonei s maj ors ect oroft hePer uvi aneconomyandhaspas s edt oas l owdowni nact i vi t yi nr ecentmont hs .
Cons t r uct i oni nMexi co:final l yr ebounds i gnal s 201 3wasayeart of or gett ot heMexi canconst r uct i on s egment .I tcont r act ed by5. 6%,mai nl yi mpact ed byt he hous i ng pol i cy changes conduct ed by t he gover nment andbydel aysi ni nf r as t r uct ur epr oj ect s .Act i vi t yr emai ned weaki nt hefir sthal fof201 4,buti thasst ar t edt or epor t r ebounds i gnal s .I nt het hi r dquar t erof201 4cons t r uct i on i ncr eas ed by 4% YoY,agai ns t0. 6% i nt he 2Q201 4 and 2. 2% i nt hefir s tone. Aspr esi dentEnr i quePeñaNi et ot ookofficei n201 2,he deci dedt os hi f tt hehous i ngpol i cyofhi spr edeces s or . The f or mermodelwasbas edoncons t r uct i nghous i nges t at es i nr emot ear easwher el and wascheap,not wi t hs t andi ng accesst ot r anspor t ,wat erand el ect r i ci t ywer eei t her expens i veordi fficul t .I nt hi smanner ,t henew gover nment hasencour agedt hebui l di ngofs kys cr aper scl os ert ot he ci t ycent er si ns t ead.Thet ur ni ngpoi ntf r om onemodelt o t heot hercaus edat ur moi li nt hehous ebui l der s ’finances , duet o hi ghi nvent or yl eveland t hehi ghercashflow neces s i t y oft he new s t andar d.Outoft he f ourl ar ges t compani esoft hes egment ,t hr eedef aul t edont hei rdebt . Twower es us pendedf r om t heMexi canSt ockExchangei n mi d201 3andt het hi r donei n201 4. Themar kethasbeenr ehear s i ngar ecover yi n201 4,ast he r emai ni ng compani esst ar t ed t o getused t ot henew envi r onment . Thesegmentact i vi t yr epor t ed afir st mar gi nalhi ghi nMar ch201 4,af t er1 5cons ecut i vemont hs ofcont r act i ononayear l ycompar i s on.Accor di ng t ot he l as tavai l abl edat a,aboos tof6. 8% wasver i fiedi nOct ober 201 4compar edwi t ht hes amemont hoft hepr evi ousyear . I nf r as t r uct ur ewor kswasal s os t r ongl yhi ti n201 3,duet o changesi ngover nment . Thi scaus eds omedel aysi nwor ks and payment s.Br eaki ng downt oconst r uct i onofci vi l engi neer i ngwor ks,segmentcont r act edby6% i n201 3. Act i vi t yi ss t i l lweak,buti ti sexpect edt ogetmoment um
wi t ht he201 4201 8 Nat i onalI nf r as t r uct ur ePl an( NI P) . The MXN 7. 7t r i l l i on ( 568 biUSD or45% of GDP)budget i ng amountwasconsi der ed ver y aggr essi ve by t he mar ket and mor et han doubl et he val ue pr opos ed by t he f or mer gover nment . Themaj or i t yoft her es our ces( 3. 9MXN orUSD) shoul d bedi r ect ed t ot heener gysect or ,i nl i newi t ht he l andmar kener gyr ef or m appr ovedi nend201 3. Fur t her mor et oget herwi t hcommuni cat i on,t r ans por ti sal s o expect edt obeamaj orf ocusandt oachi eveMXN 1 . 3t r i l l i on ( 96 biUSD)i ni nves t ment scons i der i ng t hes amet i mel i ne. Lead t ot hemoder ni zat i onofcount r y´si nf r ast r uct ur e, pr oj ect st oi mpr oveai r por t s ,r oads ,hi ghways ,r ai l waysand por t swi l lbel aunched.Thet wo l as tonesar eexpect ed t o out per f or mt heot herones . I ti swor t hnot i ng t hatur banpl anni ng and hous i ng ar eal s o expect edt obenefitf r om t heNI P,ast heywer ei ncl udedby t he fir s tt i me i nt he 201 4201 8 Pr ogr am. The budget ed amounti sof1 . 9MXN( 1 40bi USD) , t hes econdl ar ges ti nves t ment´ s r ecept or .Thel ow penet r at i onofl oansi nt hecount r yi sal s o a chal l enge t ot hi ss egment .As s et st o GDP s t and ar ound 40%,oneoft hel owes ti nt her egi on.I ns uppor tt oopenup t hemar ket ,i nJul y201 4I nf onavi t( t hel ar gestmor t gage pr ovi deri n Mexi co)r ai s ed t hel oan maxi mum t hr es hol dt o MXN 850 t housand ( 63t housand USD)and hast ur ned pos s i bl et opayi n30year swi t hfixedr at ei nl ocalcur r ency. Gr owt hi sexpect edt ogetmoment um i n201 5,ascount r y´s act i vi t ypi cksup,asi ts t ar t ed t over i f yt hefir s tpos i t i veef f ect soft heener gyr ef or m andwi t ht he 201 4201 8Nat i onal I nf r as t r uct ur ePl an. Thes peedandt hei nt ens i t yoft hi sr ecover ywi l ldependonhow s ucces s f ul t hegover nmentwi l l bei nmat er i al i zi ngal lt hes epr oj ect s . Thebi gi s s uewi l l bet oat t r actpr i vat e i nves t ment , whi chi mpl i esanenvi r onmentofs t r ongandcl ear r ul es . OnNovember201 4gover nmentgaveanegat i ves i gnal t ot hemar ket ,ast heydeci dedt ocancelat r ai ndealwi t ha Chi nes el edcons or t i um ands eeknew bi dsaf t ert hel egal i t y oft hepr oces swasques t i oned.
9
CHART4
TABLE4
Sour ce:LondonMet alExchange( LME)andBCRP
Thel oweri nt er nat i onalpr i cesal s or eflectoveri nves t ment s . I n accor dance wi t ht he hi gh r epr esent at i venessoft hi s i ndus t r yi nt hecount r y,det er i or at i onsi nt het er msoft r ade ar eas s oci at edwi t hr educt i oni ni nves t ment s .Fori ns t ance,i t cont r act edby5. 9% i nt hefir s tni nemont hsoft heyear .
Sour ce:I negi
Mi ni ngi nPer u:weakerenvi r onmenti n201 4 Per ucur r ent l yoccupi est he7t hpl aceamong t heTop 1 0 l eadi ng mi ner al -pr oduci ng count r i es.I ti st he l ar gest pr oducerofgol dands i l veri nLat am andt hes econdmai n s uppl i erofcopper . Theact i vi t yr epr es ent sar ound1 4. 7% of t hecount r y´ sGDPandi sr es pons i bl ef or55. 9% ofal l expor t s . The per i od of pol i t i cals t abi l i t yt hat t ook pl ace af t er Fuj i mor i ’ sdepar t ur ei n2000 andt heChi nes edemandf or mi ner alcommodi t i esr api d gr owt hencour aged st r ong i nves t ment si nflowsi nt ot hemi ni ngs ect ori nr ecentyear s ( s eechar t5) .Des pi t ei t sl eadi ngpos i t i on201 4haspr oven asanegat i veyeart ot hei ndus t r yandout l ookwi l lr emai n s ens i t i ve i nt he s hor tt er m.I nves t ment s ,f or i ns t ance, dr opped 4% i n1 2 mont hsaccumul at ed unt i lSept ember 201 4.
Fr om Januar yt oAugus t201 4,mi ni ngact i vi t ycont r act edby 1 . 43%,mai nl y due t ol ower copper and gol d pr oduct i on ( t oget hert heyr epr es ent50. 8% oft het ot al ) .Thi ss l owdown wasnotonl ycausedbyl oweri nt er nat i onalpr i ces,butal so r eflect st he effectofgover nment ´s combatagai ns ti l l egal mi ni ngi nt hecount r y.I nf or malmi nesar ees t i mat edi n25% of t hecount r y´st ot alsampl e.Fur t her mor edel ayswer eal so r epor t edi ni nves t ment spl ans ,i mpact i ngpr oduct i vi t y. Local pr ot es t sagai ns tt heenvi r onment al effect sofmi ni ngact i vi t y have al s o pl ayed an i mpor t antr ol e,as t hey i mpact negat i vel yoverpr oj ectdevel opment .Thecount r yhasbeen r epor t i ng s ome vi ol ent pr ot es t s by l ocalcommuni t i es i n mi ni ng ar eas fight i ng agai ns tt he envi r onment ali mpactof mi ni ngact i vi t y.Themos tnot or i ouswasr egar di ngt heConga col d mi ni ng pr oj ectwhi ch was s us pended att he end of Augus t201 2. Gener al l yt hel oweri nt er nat i onalpr i ces , del aysi ni nves t ment s del i ver yandpr ot es t swi l lcont i nuei mpact i ngmi ni ngact i vi t y i nt hecount r y.Thes egmentGDP i sexpect ed t ocont r acti n 201 4,buts houl dr ecover yi n 201 5 as i nves t ment si n new mi nesandi nexpans i onget smat ur e.
CHART5
Sour ce:Mi nem
Thel owerwor l deconomi cact i vi t y, s peci al l yt hes l owdown i n Chi na´s gr owt hr hyt hm has i mpact ed t he wor l d i nt er nat i onalpr i cesoft hemai n commodi t i es .W i t h except i on ofzi nc,al lot hermi ner alcommodi t i espr oduced byPer ur epor t edadecr eas ei ni t squot at i onf r om t he201 3 cl osi ng t ot he end Sept ember201 4( see t abl e 4) .Thi s i mpact sPer uvi ansGDPt hr oughexpor t s , whi chr epr es ent s 24% oft ot alact i vi t y.Fr om Januar yt o Sept ember201 4, mi ner alexpor t s dr opped by 21 . 2% compar ed wi t ht he s ameper i odoft hepr evi ousyear .
Mi ni ngt er r i t or yi sdefinedasar egi onwher et hes egmentr epr es ent s4% ormor eoft he r egi onaleconomy.
( 1 )
1 0
Par tI V Concl us i on
Act i vi t yi nLat i nAmer i cas houl dnoti ncr eas eatt hes amer hyt hm asbef or ei n201 5, mai nl yduet ol owercommodi t i esi nt er nat i onalpr i ces.Accor di ngt oScot i aBank,commodi t i esaccountf or45% per centoft her egi onsexpor t si ndeed.I nBr azi land Ar gent i nasof tcommodi t i esar et hemostr epr esent at i veones.Col ombi adependsbasi cal l yonoi lpr i cesandChi l e,whi l e Col ombi aandPer uar emor es ens i t i vet omi ner alones . Thei nt ensi t yoft heeffecti neacheconomydependsal soont her epr esent at i venessofexpor t si neachcount r y´sGDP.For i ns t anceBr azi li scons i der edasacl os edeconomy,asexpor t saccount edf oronl y1 1 % ofi t sGDP.Ther at i oi smor es i gni ficant i nAr gent i na( 1 3%) ,Col ombi a( 1 7%) ,Per u( 25%) ,andfinal l yChi l e( 27%) . Thi sendoft hecommodi t yboom wi l laffects ect or sbyvar i ousways .Admi t t edl ycommodi t yexpor t er swi l lf eelt hepai nof l oweri nt er nat i onalpr i ces( l i ket hemet als ect orf orexampl e) ,buts ect or sdependi ngoncommodi t i esasi nput scoul dbenefit f r om t hi st r end.I naddi t i on,s omeot hers ect or sar ei mmunef r om i nt er nat i onalcommodi t ypr i cefluct uat i onsar eas s es s edby Cof aceasmoder at e( l i ket hephar maceut i cals ect or )oraver ager i s k( l i ker et ai landaut omot i ve) .Fi nal l y,weakercommodi t y pr i cesr evealweaknes s esoft henoncommodi t ys ect or s . I ndus t r i esamongLat am f acebi gchal l engess uchasl ow pr oduct i vi t y, i nadequat et r ans por ti nf r as t r uct ur e,hi ghbur eaucr acyand weakr ul eofLaw i ns omecas es .Dealwi t ht hi sl i mi t at i onsand wor kt os hi f tt hi ss cenar i oi skeyt oachi evel ongt er ms t r onggr owt hr at e.
RESERVATI ON Thi sdocumenti sas ummar yr eflect i ngt heopi ni onsandvi ewsofpar t i ci pant sasi nt er pr et edandnot edbyCof aceont hedat ei twaswr i t t enandbas edonavai l abl ei nf or mat i on. I tmaybemodi fiedatany t i me. Thei nf or mat i on, anal ys esandopi ni onscont ai nedi nt hedocumenthavebeencompi l edont hebas i sofourunder s t andi ngandi nt er pr et at i onoft hedi s cus s i ons . HoweverCof acedoesnot , under anyci r cums t ances , guar ant eet heaccur acy , compl et enes sorr eal i t yoft hedat acont ai nedi ni t . Thei nf or mat i on, anal ys esandopi ni onsar epr ovi dedf ori nf or mat i onpur pos esandar eonl yas uppl ement t oi nf or mat i ont her eadermayfindel s ewher e. Cof acehasnor es ul t s bas edobl i gat i on, butanobl i gat i onofmeansandas s umesnor es pons i bi l i t yf oranyl os s esi ncur r edbyt her eaderar i s i ngf r om us eof t hei nf or mat i on, anal ys esandopi ni onscont ai nedi nt hedocument . Thi sdocumentandt heanal ys esandopi ni onsexpr es s edi ni tar et hes ol epr oper t yofCof ace. Ther eaderi sper mi t t edt ovi ew orr epr oducet hem f ori nt er nalus eonl y ,s ubj ectt ocl ear l ys t at i ngCof ace' snameandnotal t er i ngormodi f yi ngt hedat a.Anyus e,ext r act i on,r epr oduct i onf orpubl i corcommer ci alus ei spr ohi bi t edwi t hout Cof ace' spr i oragr eement . Pl eas er ef ert ot hel egal not i ceonCof ace' ss i t e.
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