Argentines say they are yet to feel the benefits of cooling inflation and analysts predict the five-month streak could end when official figures for June were released on Friday, Reuters reported. Since President Javier Milei took power late last year, inflation has slowed dramatically in Argentina, decelerating from 25.5% in December to 4.2% in May. The sharp fall has been attributed to a suite of cost-cutting and austerity measures that have put a lid on consumer demand, as well as measures to reduce money printing.
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South America
Investors in Chile are bracing for a rare flood of commercial buildings to hit the market as two of the nation’s largest real estate investment funds near liquidation, Bloomberg News reported. Real estate portfolios worth $552 million held in funds managed by heavyweights Toesca SA and Banchile Inversiones could soon go on sale due to recent shareholder votes. That’s raising fears of a looming vicious cycle in Chile. Low prices prompted investors to give up and liquidate real estate investments, but the upcoming sudden supply of buildings could push prices down even further.
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Brazil’s annual inflation rate rose less than expected in June, bolstering the central bank after it came under fire from critics for pausing its interest rate cuts to combat simmering price pressures, Bloomberg News reported. Official data released Wednesday showed prices increased 4.23% from a year earlier, below the 4.32% median estimate from analysts in a Bloomberg survey. On the month, inflation stood at 0.21%, under all forecasts.
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The Argentine government published a sweeping decree on Wednesday aimed at opening up the country's aviation sector, inviting foreign airlines to enter the market long dominated by state-run carrier Aerolineas Argentinas, Reuters reported. The reform should boost the number of routes, flight frequencies and bring in more competitors, the transportation secretariat said in a statement. Carriers can now petition to operate as many routes and frequencies as they want, subject to safety approval, according to the decree.
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Brazil’s top decision-maker on currency intervention signaled he wouldn’t pull the trigger on any move to stem this year’s rout in the real without obtaining full support from the central bank board, Bloomberg News reported. Gabriel Galipolo told investors in private meetings this month he would seek consensus from fellow bank directors before taking action in the foreign exchange market, according to four participants of those gatherings.
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Colombian inflation accelerated for the first time in 15 months in a setback for the government which wants faster interest rate cuts to revive economic growth, Bloomberg News reported. Consumer prices rose 7.18% in June from a year earlier, the statistics agency said Monday, from 7.16% in May. Prices roses 0.32% from a month earlier, slightly higher than the 0.30% median forecast of 25 analysts surveyed by Bloomberg. One measure of core inflation closely tracked by the central bank, which excludes volatile food prices, slowed to 7.64%% from a year earlier.
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Argentina’s Mercado Abierto Electronico and Matba-Rofex agreed to merge into a single exchange, creating the country’s largest futures and foreign-exchange market, Bloomberg News reported. The companies expect to make the announcement after the market closes on Monday. The new exchange will include agricultural transactions, peso futures against dollars and trading on bonds, including local treasury and central bank notes. Argentina’s foreign exchange and fixed income market volume has plummeted since the country reintroduced capital controls in 2019.
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Governments owe an unprecedented $91 trillion, an amount almost equal to the size of the global economy and one that will ultimately exact a heavy toll on their populations, CNN reported. Debt burdens have grown so large — in part because of the cost of the pandemic — that they now pose a growing threat to living standards even in rich economies, including the U.S. Yet, in a year of elections around the world, politicians are largely ignoring the problem, unwilling to level with voters about the tax increases and spending cuts needed to tackle the deluge of borrowing.
Avianca Group plans to confidentially file for an initial public offering in the U.S., the holding company for the Colombian airline said on Monday, Reuters reported. The Bogota-based airline, with over 100 years of operation since 1919, is moving ahead with its listing more than two years after it emerged from bankruptcy. Avianca — which serves domestic markets of Colombia, Ecuador and Central America — was one of the major Latin American airlines that filed for bankruptcy during the pandemic, hurt by a downturn in travel demand.
A former executive of Brazilian retailer Americanas accused of connection with an alleged billion-dollar accounting fraud landed at an airport in Sao Paulo on Monday and handed over her passport to the country's federal police, Reuters reported. Anna Saicali was one of the main targets of raids launched by Brazil's police last week as part of their probe into the 25.3 billion-real ($4.53 billion) accounting scandal that led Americanas to file for bankruptcy in January 2023. A court in Rio de Janeiro ordered Saicali's arrest while the former executive was abroad.