The five largest economies in Latin America and the Caribbean, which are Brazil, Mexico, Chile, Colombia and Peru, are receiving the global shock of rising energy and food prices, with the highest inflation in at least two decades, warned economists International Monetary Fund (IMF).
This condition makes the countries of the region vulnerable to the rising commodity prices that will continue to occur as the war between Russia and Ukraine progresses, they stressed.
Within an analysis entitled “How the war in Ukraine impacts all regions of the world”, they explained that the channel of contagion due to the situation geopolitics in that region it is communicated to Latin America via food and energy prices.
Central banks will then play a decisive role in defending their credibility in the fight against inflationthey recorded.
In the analysis, led by the regional directors of the IMF for the five regions of the world, they argue that financial conditions may become more difficult for the countries of the region as the conflict intensifies.
“The intensification of the conflict in a hawkish domestic monetary policy environment may weigh much more on growth,” they stressed.
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