South America

Brazilian consumer prices rose more than expected in the month to mid-May, statistics agency IBGE said on Tuesday, marking the sharpest jump for the period in six years as the country grapples with galloping inflation, Reuters reported. The IPCA-15 consumer price index rose 0.59% in the month, according to IBGE. That was down from 1.73% in the previous month as the central bank has raised interest rates aggressively, but still above expectations of a 0.45% rise, according to the median forecast in a Reuters poll. Inflation in the 12 months to mid-May hit 12.20%, up from 12.03% in mid-April.

A senior official in Argentina charged with leading government efforts to tame sky-high inflation resigned on Monday due to differences over how to contain steadily creeping prices, which have hobbled the country's economy, Reuters reported. Annual inflation in the South American nation reached 58% in April, as many food and energy prices surged in the aftermath of Russia's invasion of Ukraine, with some analysts predicting consumer prices will jump 70% later this year.

Chile on Friday accepted a short-term liquidity line (SLL) from the International Monetary Fund (IMF) of around $3.5 billion, aiming to support the South American country's economy as it rebounds from the COVID-19 pandemic, Reuters reported. Chilean authorities also notified the IMF that of their decision to exit the current two-year flexible credit line, which was set to expire at the end of the month.

Brazil's Economy Ministry on Friday said it needs to freeze 10 billion reais ($2.1 billion) in expenditures to comply with the spending cap rule, which limits spending growth to the previous year's inflation, Reuters reported. The limitation highlights President Jair Bolsonaro's difficulties to approve new expenses that are not yet included in the budget while seeking reelection in October.

Brazil's government debt as a share of gross domestic product fell to 78.5% in March, the lowest level in almost two years, with improved revenues in states and municipalities leading to a new primary surplus for the month, Reuters reported. That compares with a gross debt of 79.2% of GDP in February, to the best result since April 2020 (78.4%), when the country was beginning to be hit by the coronavirus pandemic. Booming revenue, helped by a surge in commodities, has lifted the government's budget, while expenditures have not grown at the same pace due to a constitutional spending cap.

Colombia's economy could have grown by 7.5% in the first quarter of 2022 versus the year-earlier period, mainly boosted by domestic consumption, though this will begin to moderate amid inflationary pressures, a Reuters poll revealed on Friday. Estimates from 13 analysts for economic growth fluctuated between 6% and 8.30% in the three months ended March 31. If growth is in line with the poll's median forecast of 7.5%, Latin America's fourth-largest economy will have expanded at a slower rate than in the prior quarter ending Dec. 31, when growth hit 10.8%.

Services activity in Brazil rose more than expected in March and at a record pace for the month, official figures showed on Thursday, marking a strong recovery from the severe downturn caused by the COVID pandemic, Reuters reported. Services activity increased 1.7% in March from February, more than double the 0.7% growth expected by economists according to a Reuters poll, reaching its highest level since May 2015, the government statistics agency IBGE reported. That put the sector 7.2% above the level of February 2020, before the onset of the pandemic.

LATAM Airlines Group SA, the largest air transport group in Latin America, said on Wednesday that it garnered support from almost all of its creditors for a reorganization plan that the company is taking before a U.S. court, Reuters reported. The airline said that the agreement was presented to a Manhattan bankruptcy court that is handling its Chapter 11 bankruptcy case, which it filed for in May 2020 due to the impact of the COVID-19 pandemic on its operations.

Latin American central banks will likely extend their monetary tightening campaigns beyond what was originally expected after inflation surged past forecasts in April, with steep increases in food and fuel costs stinging policy makers, Bloomberg News reported. Brazil’s consumer prices rose 12.13% from a year prior according to data released Wednesday, the fastest pace in nearly two decades and also above the 12.06% median estimate in a Bloomberg survey. Headline inflation also topped forecasts in Peru, Colombia and Chile in the same month, as did the closely-watched core index in Mexico.

Retail sales in Brazil rose more than expected in March, the third straight monthly gain, despite double-digit inflation in Latin America's largest economy, official figures showed on Tuesday, Reuters reported. According to government statistics agency IBGE, sales grew 1% in March from February, more than the 0.4% increase forecast in a Reuters poll of economists. Six of the eight activities surveyed recorded growth, with computer and communication office equipment and supplies gaining 13.9%.