Hello, and welcome back to the Latin America Weekly newsletter! This week: we take an in-depth look at inflation troubles across the region. In Mexico, AMLO is going after private energy companies. Saab extradition causes panic in Maduro’s Venezuela.
Latin America’s spiralling inflation woes
For the longest time, Latin America was the epicenter of the Covid-19 crisis. Now, 18 months after the pandemic began, the region is being swept by a second wave of pandemic woes — this time linked to the economy and, to be more specific, inflation.
Why it matters. Rising inflation takes a severe toll on workers’ purchasing power and contributes to economic instability that can hinder the post-pandemic recovery. Plus, it can erode popular support for governments, with some of the region’s most important nations braced for elections in November.
How dire are things? Consumer prices are breaking record highs across the board. Twelve-month inflation in Argentina sits at 52.5 percent, just shy of a 30-year record. In Peru, consumer prices are at their highest annual reading in 12 years. Chile, Colombia, and Mexico, were not spared, either.
Pandemic spending. A combination of factors led to the widespread price spike. Economic damage caused by the pandemic...