Aviso LatAm: July 23, 2022

​​​​​What you should know

  • Food prices: In May, the price of wheat increased 90 percent year-on-year in Argentina and Chile, amid rising food inflation and the ongoing war in Ukraine.
  • US-Mexico: President Biden and President Andres Manuel Lopez Obrador met last week and committed to facilitating trade between their countries and relaxing trade costs.
  • Brazil: Congress approved a $7.6 billion spending bill that President Bolsonaro hopes will lift his lagging re-election hopes.

Monitoring economic headwinds and tailwinds in the region

  • Costa Rica: President Chaves resumed the process to join the Pacific Alliance trade bloc. He hopes it will open Costa Rica to the global economy and trade more with China
  • Canada: After raising concerns about Mexico’s business environment for mining, energy, and biotechnology sectors, Canada is exploring a possible Canada-Mexico High Level Economic Dialogue. 
  • Mexico: The US Trade Representative expressed concerns over Mexico’s energy reforms appearing to violate USMCA, and will request formal consultations on the dispute.  
  • Panama: Protests against rising prices, especially for fuel, continued to block portions of the Pan-American Highway.
  • Peru: A forecasted 3.6 percent growth continues, despite plummeting copper prices and global economic uncertainty. 
  • Cuba: Periodic blackouts continue due to lack of capacity in the country’s power grid, weakened by lack of maintenance, fires at generators, and high fuel prices. 
  • Colombia: The incoming head of the national tax and customs agency, DIAN, said that President-elect Petro’s proposed tax reform will raise $10.9 billion annually.
  • Chile: The Central Bank stepped in to support the nation’s currency after it plummeted to a record low, fueling inflation. Read more below.

In focus: Chile’s economy

While Boric’s newly appointed government faces plummeting approval rates, Chileans are struggling to cover the costs of soaring food and energy prices. In the last month, the Chilean peso lost more than 17 percent of its value against the dollar and its most important export—copper— faced an international price drop of 30 percent.    

On July 18, a $25 billion liquidity injection came into effect, and is expected to last until September. The hope is that the injection will contain the fall of the peso and bring stability to local markets. Thus far it has worked – the announcement boosted the peso, which closed with a 7.8 percent gain last Friday. The government has announced it will continue monitoring the situation given the challenging domestic and international context as well as Chile’s limited foreign exchange reserves.   

Health + Innovation

  • Antigua and Barbuda: Minister of Health Sir Molwyn Joseph advised governments in the Caribbean to add the COVID-19 vaccine to the regime of regular immunizations for children.
  • Brazil: SINOVAC, a Chinese COVID-19 vaccine, was authorized for emergency use in children between 3 and 5 years old.
  • Omicron: The Pan-American Health Organization (PAHO) warned of the growing number of COVID-19 cases driven by BA.4 and BA.5 subvariants despite overall cases decreasing in the Americas.
  • PAHO: Director Carissa F. Etienne announced a three-step plan to work with member countries to bolster regional capacity to manufacture vaccines and medical tools.

Geopolitics of vaccine donations: US vs. China

  • The United States outpaces China in its donations of COVID-19 vaccines to Latin America and the Caribbean, with Colombia and Mexico topping the list. The region has received roughly 52 percent of all US COVID-19 vaccine donations. To learn more, visit our COVID-19 vaccine tracker: Latin America and the Caribbean.