In second place was Ecuadorgoing from 1.9% in 2021 to 3.7% last year.
Changes in positions begin with Brazilthird in 2022 with the 5.8% after being eighth the previous year with 10.1%.
Paraguayan was located in fourth place, with an increase of 6.8% to 8.1%.
The fifth country in 2002 was Uruguay with an inflation of 8.3% (it was seventh in 2021 with 7.9%).
6th was placed Peruwith a rise in retail prices of 8.6% (fifth in 2021 with 6.9%).
Chili it had been in sixth place in 2021 with 7.2% inflation, compared to the 12.8% that took him to seventh place last year.
Colombia went from the third to the eighth position, to increase the consumer price index from 5.62% to 13.12%.
Argentina remained in ninth place and went from 50.9% in 2021 to 94.8 in 2022.
Venezuela remains the country with the highest inflation rate despite having slowed down the rise and go from 660% in 2021 to 305% in 2022.
Causes of inflation in Latin America
The main component of increases Generalized prices in the countries of the region were the foodswith some particularities such as the transport in Chile, Colombia and Peruthe clothing in Argentina, the restaurants and accommodation services in Uruguay and the health and personal care services in Brazil.
“What we had last year was a strong rise in the price of food as a result of the war (between Russia and Ukraine),” he explained to Télam. Sebastian Menescaldi, director of EcoGo Consultores, particularly in the cases of wheat and sunflower, to which he added “increases in transportation costs, which negatively impacted all of Latin America.”
What Menescaldi pointed out is reflected in the numbers provided by the different official statistical entities of each country, with cases in which the item of food more than doubled the general level of inflation.
It is the case of Chiliwith inflation of 12.8% and an increase in the item “Food and non-alcoholic beverages” of 24.7%, Colombia (13.12% and 27.81%), Peru (8.56% and 15.22%) and Brazil (5.79% and 11.64%, respectively).
“To that was added the depreciation of local currencieswhich caused an increase in prices at a general level and determined that the entire region had rises in interest rates to begin to combat inflation that is already beginning to deflate, with less impact in recent months and which is also It’s going to slow down in 2023,” he predicted.
This behavior was reflected in most of the countries of the subcontinent, which concentrated the bulk of inflation for the year in the first half and already in the second semester they showed an attenuation of the indices.
Such is the case of Paraguayanwhich reduced its interannual rate from 11.8% in April to 8.1% in December, or Brazilwhich in the same period contracted from 12.13% to 5.79%.
In Brazil, the deflation it had in the third quarter (-0.68% in July, -0.36% in August and -0.29% in September) was decisive for transform it from the country with the highest inflation in South America after Venezuela and Argentina to one of the lowest rates, after Bolivia and Ecuador.
The main factor for this decrease was the fuel price cutto the point that in all of 2022 the “Transportation” item registered a fall of 1.29%.
For the chief economist of the Latin American Economic Research Foundation (FIEL), Juan Luis Bour, the reasons for the return of inflation in South America are found “Firstly, that most countries had a strong fiscal expansion in 2021“, from the increase in the items destined to meet the coronavirus pandemic emergency.
“If it is not adjusted on time, that spills over into inflation,” he said in statements to Télam, adding that “what is relevant is that some are correcting with longer lasting policieslike Uruguay”, in addition to highlighting that “Brazil adjusted its monetary policy very strongly and lowered taxes, which makes the difference” to explain the reduction in year-on-year inflation to less than half in eight months.
Menescaldi brought a different vision, since he maintained that “Latin American countries did not issue currency to finance the deficit, but rather issued debt in general, with the exception of Argentina, due to lack of credit that the country has”.
“Most of the issuance was global across the United Statesthat this did generate inflation because there were not so many assets for so many dollars in the world,” he completed.
However, Bour cautioned that while the conflict between Russia and Ukraine influenced the rise in food and energy prices“inflation had already been taking place since the end of 2021”, before the start of the war.
Source: Ambito
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