Recent economic figures indicate that many Latin American countries will close the year with the highest inflation rates in decades.
Although, broadly speaking, the increase in the cost of living is attributed to the consequences of the war in Ukraine, exacerbated by the COVID-19 pandemic, both of which wrought problems in supply chains and wreaked havoc in the world’s largest economies. The internal management of each country continues to be measured in month-by-month statistics by the Consumer Price Index (CPI).
In grouping the countries that register the highest inflation data, it becomes clear that only three of them have single-digit inflation: Mexico, Peru, and Brazil, either because they have maintained inflation within that margin or because they managed to reduce it in the last quarter. The rest face double digits inflation rates, threatening their economies. Some even reached triple digits (as is the case in Venezuela), or are on their way to reach it by the end of the year, as could happen in Argentina.
Although some governments welcomed the October inflation data, November brought some surprises. Peru registered annual inflation of 8.45% in November, compared to the 8.28% it had reported in October. The Colombian economy followed suit; in November inflation went up to 12.55% up from 12.22%. The current rate represents the highest rate of inflation in the last 23 years.
In Colombia, President Gustavo Petro publicly asked the Central Bank of the Republic, at the beginning of October, not to toughen the economic policies that could affect the pocket of Colombians. Central banks regularly increase interest rates to discourage consumption and thus cool down the economy, but the president, who is an economist, expressed his belief that this will only cause the recession that is forecast for Europe and the United States to reach Colombia.
Venezuela had a decrease in year-on-year inflation data from the beginning of the year to July, when it stood at 137.1% per year, compared to the 472% it had reported in January; however, from August to October, the CPI followed an upward trend.
Meanwhile, a contrast is found in the region’s strongest economy: Brazil. In that country, since June the annual inflation rate has been falling each month. In June, it reached 11.89% year-on-year, while in October, the CPI showed inflation at 6.47%, taking pressure off the pockets of Brazilians.
Translation: Orinoco Tribune
- fvorinocohttps://orinocotribune.com/author/fvoltura/February 5, 2023
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