Latin American countries are struggling with inflation

The FAO Food Price Index in March rose 12.6% from the previous month. Rising food prices and escalating energy prices are causing many regions, including Latin America, to be significantly affected by the price storm, exacerbating inflation.

Chile, one of South America’s wealthiest countries, is grappling with soaring inflation and prices. Ms. Cecilia – Chilean said: “This fact is alarming and sad. Before you could cover a whole month with a certain amount of money, now with the same amount, you can only spend within almost 2 weeks, at most until the 20th of the month”.

In Mexico, the region’s second-largest economy, consumer prices rose in March at a rate not seen since 2001.

“Basic commodities are going up the most, so all the money we make is not enough to buy food, go to school, buy clothes, shoes,” said Mexican resident Alicia Cabrera.

Meanwhile, Brazil is also seeing monthly inflation rise above forecasts, to the highest level in 28 years. The increase in Peru is also the highest in 25 years.

Inflation rose rapidly, despite the governments of countries raising interest rates and efforts to stabilize food and fuel prices for the people. Analysts say this situation will push central banks to raise interest rates earlier than planned, in order to curb inflation.

In Argentina, where annual inflation is above 50% and is expected to continue to rise, the central bank is likely to raise rates again this month, after three consecutive hikes this year. In particular, Brazil has raised interest rates in nine consecutive monetary policy meetings since March 2021 to combat inflation, helping the real appreciate.

Nearly 60% of advanced economies now have annual inflation above 5%, the largest percentage since the late 1980s, according to statistics.

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