Which Latin American countries are winning the fight against inflation? Which are losing it? Our analysis shows some surprising results.
BY CHRONICLE STAFF
Both Mexico and Chile are seen as macro economic models for Latin America. However, the two countries are among the five that appear to be losing the fight against growing inflation this and next year, according to an extensive Latin Business Chronicle analysis of new data from the International Monetary Fund (IMF). The two countries - along with Venezuela, Bolivia and Honduras - are seeing inflation growing both this and next year.
The trend in these five countries stands in contrast with Latin America as a whole, which is seeing reduced rates this year. The region is likely to end the year with inflation of 5.0 percent, a decline from last years rate of 5.3 percent, the IMF estimates. Thats the lowest rate the IMF has registered in its database, which goes back to 1980. Next year, however, inflation will grow to 5.8 percent, the fund forecasts, thanks to strong inflation growth in Venezuela, Bolivia and Argentina.
"With fiscal revenues being boosted by strong growth and export performance, government spending has also been allowed to accelerate in a number of countries, providing a procyclical fiscal impulse and adding to overheating pressures," the IMF said in its latest World Economic Outlook released last week. "Such concerns are particularly salient in Argentina, where recent policy measures have added to fiscal stimulus, and in Venezuela."
On the opposite end are...