Inflation does not give in its arm to twist in Latin America. In the first four months of 2022, the region continues to face the inflationary shocks that it has dragged on since the previous year, but to which are added the consequences of the war in Eastern Europe and the massive confinement in China due to the resurgence of covid-19 .
Thus, after the first quarter of the current year, it is possible to make a survey on how the costs of living for the citizens of the region have advanced.
“The first 4 months of inflation in Latin America have been marked by a higher-than-expected acceleration in prices. In the vast majority of countries, surprises have been observed in food prices, at the same time that indexation mechanisms have been activated that have meant that even items that did not present increases last year are now showing them”, Munir Jalil, director of economic research for the Andean region of BTG Pactual, told Portfolio.
discarding to Argentina and Venezuela, Due to its high costs of living and its inflationary spiral for decades, the highest annual levels of the Consumer Price Index (CPI) are registered in three territories: Brazil, Chile and Paraguay.
In April, the Brazilian economy registered a monthly variation of its cost of living of 1.06%, which brought annualized inflation to 12.13%, its highest value in 18 years.
The greatest variation and the greatest incidence, 2.06% and 0.43 percentage points (pp), came from the category of food and beverages.
To combat this, the Government of Jair Bolsonaro authorized this past Friday the reduction of tariffs for “sensitive imports”, among which are wheat, corn, meat, among other key products of the industry.
On the other hand, the second box with the highest inflation in the region for these four months is occupied by Paraguay.
The Guarani territory registered a monthly inflation in April of 1.5%, which brought the annual figure to 11.8%, the highest rate in almost 14 years, according to the newspaper La Nación, which also reports food as the item that grew the most contributed to the annual data.
Third on the list with the highest cost of living in the first four months of 2022 is Chile. The southern country registered in April a variation in its cost of living of 1.40%, which increased the annualized figure to 10.50%. And, following the pattern, the variation the category of food and beverages (2.3%) was the one that grew the most and contributed to the general figure.
The government of leftist President Gabriel Boric has already announced the first measures that seek to “stabilize” inflation. One of them will be to allocate US$40 million to the gasoline stabilization fund and bills to stabilize bills and sharp increases in services such as electricity.
With annual data of 1.67% and 0.87%, respectively, Ecuador and Bolivia they occupy the last positions as the lowest annual inflation rates in the region, according to the survey.
In an intermediate position are Mexico and Peru, with the annualized data to April of 7.68% and 8.62% respectively and, in a few boxes above, Colombia and Uruguay their 12-month records approach almost 10%, with 9.23% and 9.37%, properly for each one.
Argentina and Venezuela playin another league” of living costs for more than a decade.
The southern cone country revealed its inflationary data this past Thursday. Its monthly variation was 6%, thus achieving an annualized figure of 58%, the highest figure in the last 30 years, according to the local press.
Venezuela, for its part, which since last year emerged from the cycle of hyperinflation, registered in April a variation in the cost of living of 4.40% and annualized of 222.30%, according to data from the central bank; which varies significantly from that provided by the Venezuelan Finance Observatory, where the monthly figure was 3.6% and the annual figure was 172%.
Thus, for this month of April, Argentina surpassed the inflation of Venezuela.
ROBERTO CASAS LUGO