LatAm Daily Briefing: Argentina’s 2021 Inflation Was 50.9%; UN Calls for Greater Peace Efforts in Colombia

14 January: Find out what's been happening in Latin America with our latest news update.

Posted Friday, January 14th 2022
LatAm Daily Briefing: Argentina’s 2021 Inflation Was 50.9%; UN Calls for Greater Peace Efforts in Colombia

Argentina's consumer price index accelerated in December by 3.8%, lifting the country's inflation rate for 2021 to 50.9%, one of the highest rates in the world, according to INDEC national statistics bureau. The data underlines Argentina's continued struggle to tackle runaway price increases. In 2020, a year of economic paralysis due to the Covid-19 pandemic, price increases totaled 36.1%. In its 2022 budget bill, which was rejected by Congress, the government projected an inflation rate of 33% for 2022, but opposition lawmakers consider that estimate to be unrealistic, as do analysts. According to the most recent Central Bank survey of consultancy firms, analysts and banks, prices will soar by 55% over the next 12 months.

Brazil retail sales rose 0.6% in November against expectations of a monthly drop, official figures showed on Friday, even though more than half of the activities gauged had a negative result in the period with double-digit inflation dragging on consumption. The seasonally adjusted monthly increase of 0.6% in November from October beat the median forecast of a 0.2% decline in a Reuters poll of economists. Government statistics agency IBGE also revised October's indicator to a 0.2% rise from a previously reported 0.1% drop. IBGE said month-on-month sales plunged in five of the eight categories surveyed in November. The general result, however, was lifted by growth in sales of hypermarkets, supermarkets, food products, beverages and tobacco, up 0.9% from the previous month. On a year-on-year basis, the 4.2% fall in November was smaller than the 6.5% slump forecast in the poll.

Less than a month after his electoral triumph on December 19th and a few days before he announces his cabinet, Chile’s President-elect Gabriel Boric had his first face-to-face meeting with the Chilean business community on Thursday, and in which he ratified his moderate intentions and openness to dialogue. Boric spoke of generating conditions of stability, dialogue and fiscal responsibility, and aims to reduce the fiscal deficit to 3.9% this year. He also spoke of the deep transformations that he seeks to deploy between 2022 and 2026 during his four years of government. He said "the bulk of the population lives surrounded by uncertainty" and stated that he had the "conviction" that all those present at the encounter do not want to repeat history, referring to the social unrest of 2019. “Our current status quo holds back economic development and deepens social unrest. We saw this in 2019,” he said.

Violence and illegal armed groups threaten the peace agreement in Colombia, Antonio Guterres, Secretary General of the United Nations, has warned, and called on the Colombian people to "spare no effort" to make the pact work. While he said it is “not too late” to reverse this trend, much more sustained and effective action will be required for the agreement to succeed, Guterres said in the latest quarterly progress report of the UN mission in Colombia. "This historic window of opportunity could gradually close" if these levels of violence persist, he warned after praising the "historic advances" produced thanks to the "determined efforts" of Colombian citizens, he said. Despite the government signing a peace agreement five years ago with the FARC, the largest guerrilla group in the country, violence persists in the country.

Ecuador will reopen schools on January 17th, but attendance will be gradual and voluntary in a bid to continue stemming the spread of Covid-19. Education Minister María Brown announced the measure, with all public institutions that have approved their educational continuity plans reopening after the one-week suspension of school activities. However, schools must comply with maximum capacity restrictions for the resumption of activities. For schools where 85% of those present, including teachers, students and administrative staff, have received full vaccination, the minimum spacing within the school will be 2.25 square meters of area per person, and in schools with fewer than 85% of people vaccinated, the maximum capacity will be for 50% of enrolled students.

The Canadian government announced that it will join Mexico's request to establish a dispute settlement panel under the USMCA trilateral free trade agreement with the US to resolve the difference in interpretation of rules of origin in the automotive sector, where Mexico believes the US is not adhering to what was originally agreed. "Canada joins Mexico's request to address the US interpretation of the rules of origin governing the regional content value calculations that must be made for a vehicle to qualify for duty-free treatment under the treaty,” Mary Ng, Canada's Minister of International Trade, Export Promotion, Small Business and Economic Development, said. The interpretation the US adopted in July 2020 is inconsistent with the agreement," she said. The Canadian decision came on the second and final day of the USMCA undersecretaries' meeting, which was held virtually and hosted by Mexico.