The inflationa worldwide phenomenon that is worsening with the crisis of the war in Ukraine, continues to set records in Latin America, a region that, although accustomed to high volumes of this phenomenon, has been under control in recent years.
(Read: Inflation rises to 5.9% in the eurozone and 6.2% in the European Union).
It is worth remembering that inflationary pressures began last year with the economic recovery and it was glimpsed that they would be present in the development of 2022, and therefore, the region was going to slow its growth. But, at some point in the year control of him was expected.
At the same time and aware of their critical work in this matter, the central banks throughout the continent have begun to raise the interest rate in their respective economies as one of the mechanisms to stop the uncontrolled increase in consumer prices.
For Germán Moreno, professor of Economics at the Universidad de los Andes, “accelerated inflation is becoming a global phenomenon. The US has the highest inflation in 40 years and the European Union presents levels not seen since 1996”.
In the case of Latin America, “the story is similar: inflation is skyrocketing and is projected to continue to grow, at least for the next 3 months, which would make it a serious risk for the region,” Moreno notes.
The most recent data for the region is for February. In this period, Argentinaone of the countries with the most present economic crisis in the region, surpassed Venezuela for the first time as the Latin American economy with the highest inflation.
(What’s more: Each additional point of food inflation increases poverty by 0.25 pps: Anif).
Last month, inflation in the country in the south of the continent (see graph) was 4.7%, while in Venezuela it was half of that figure, 1.7% in the case of the measurement of the Venezuelan Finance Observatory (independent) and 2.9% by the Central Bank of Venezuela.
It is important to remember that the neighboring country came out of the hyperinflationary spiral at the beginning of the year, among other reasons, supported by the transactional dollarization that is experienced in more than 60% of the economy, according to estimates by private consultants.
The ‘ranking’ of the month of February is continued Colombia (1.63%), Uruguay (1.47%) and Paraguay (1.4%), with the latter closing the first places. Brazil (1.01%), Mexico (0.83%), Peru (0.31%) and Chile (0.3%) are located in the middle of the table. Finally, Ecuador (0.23%) and Bolivia (0.12%) occupy the last boxes. In fact, in this last Andean country the variation in prices was concentrated in tomatoes, cheeses and university fees.
On the other hand, in the accumulated 12 months between the months of February 2021 and 2022, the positions do not vary much but there are interesting results.
Venezuela tops the list with an accumulated 246% and 340%, depending on the OVF or the BCV. Argentina follows with 52.3%, a level that worries President Fernández, who decided to wage “a war” to control it with a protectionist manual.
Far away, with a wide margin between second and third place, is followed by Brazil with 10.8%; Paraguay (9.3%); Uruguay (8.85%); Colombia (8.01%) and Chile (7.8%). The list is closed by Mexico (7.28%), Peru (6.15%), Ecuador (2.71%) and Bolivia (0.70%).
(Read: Analyst estimates indicate that March inflation would be 0.90%).
“Inflation in Latin America in general will continue to grow since the figure for February still does not incorporate the global shock in fuel prices, nor the price of food in recent weeksMoreno said.
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