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Inflation in Latin America continues to surprise negatively

Gabriel Micillo•Friday, February 16, 2024•1 min read

Inflation in Latin America continues to surprise negatively

Argentina solidified its position as the country with the highest inflation worldwide, while in Colombia, the deceleration continues. Mexico and Brazil showed worse-than-expected data.

The major economies of Latin America are still struggling to bring inflation back to pre-pandemic levels, and the latest numbers brought some negative surprises, especially in the cases of Brazil and Chile. Meanwhile, Argentina managed to end the month with a smaller-than-expected price increase, but still remains the country with the highest inflation in the world, more than doubling that of Venezuela.

On the other hand, Colombia, the country that took the longest to break below the 10% year-on-year mark (excluding Argentina and Venezuela), finally achieved it in December 2023, and the deceleration trend continued in January.

Some of the inflation data that negatively surprised market predictions:

  • Brazil experienced a monthly inflation rate of 0.42% in January, above the market’s forecast of 0.34%. Thus, Brazil’s Consumer Price Index closed the first month of the year at 4.51% year-on-year (it had been 4.62% in December).
  • In Mexico, prices rose by 0.89% in January, while the market expected an increase of 0.88%. Although the difference was minimal, year-on-year inflation reached 4.88% (it had been 4.66% in December).
  • In Chile, the market expected inflation to be 0.4%, but the data showed 0.7%. The year-on-year rate fell to 3.8% (it had been 3.9% in December).

In Colombia, year-on-year inflation was only slightly above expectations (8.35% when projections were 8.33%). Still, it is positive that the country is gradually leaving behind the numbers above 10% that it had been experiencing.

Meanwhile, Argentina closed the month with a monthly inflation rate of 20.6% (the market expected 21.9%), bringing the year-on-year inflation to 254.2%. This makes the South American country the most inflationary in the world, well above Venezuela (which dropped to 107.4% in January).

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micillogabriel@gmail.com
Gabriel Micillo
Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.
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