South America

Brazil’s central bank is facing an emergency of its own making that threatens to sabotage years of deft policy making and credibility gains, Bloomberg News reported. Inflation forecasts are above the 3% target into the foreseeable future and confidence is crumbling as markets question whether the central bank — or the presidency — is commanding monetary policy. It’s a devastating reversal for an institution that was lauded for its fast action against a post-pandemic price surge and subsequent rate cuts that were months ahead of developed economies.

Colombia is on track for its widest fiscal deficit since the Covid-19 pandemic as falling tax revenues leave a hole in the nation’s finances, Bloomberg News reported. The government said Friday it will target a 2024 deficit of 5.6% of gross domestic product this year, from a previous target of 5.3%. The peso and local currency bonds have dropped in recent days as nervous investors ditch the nation’s assets amid concerns over the ballooning fiscal deficit. The government will trim its 2024 budget by 20 trillion pesos ($5 billion), Finance Minister Ricardo Bonilla said.

Argentina's largest oil union said on Saturday it will strike for 48 hours starting Tuesday to demand higher salaries, a move that will affect production at the giant Vaca Muerta shale formation, Reuters reported. The Vaca Muerta hydrocarbon formation is the world's second-largest shale gas reserve and the fourth largest for shale oil, and plays a central role in Argentina's plan to reverse a significant deficit in its energy trade balance and become a net energy exporter.

Monthly inflation in Argentina slowed to its lowest level in May since early 2022, capping the fifth straight cooler print under President Javier Milei as market doubts linger that the trend can be sustained, Bloomberg News reported. Consumer prices rose 4.2% last month, less than economists estimates for 5% and the lowest level since January 2022. From a year ago, inflation slowed to 276.4%, according to government data published Thursday. Communication costs and education led monthly price gains in May by categories.

President Javier Milei will meet face-to-face with the head of the International Monetary Fund in Italy this week, with Argentina claiming it has cleared a key hurdle as it seeks fresh funds to eventually lift capital controls, Bloomberg News reported. The libertarian leader’s talks Friday with Managing Director Kristalina Georgieva on the sidelines of the Group of Seven summit will take place a day after the Fund’s executive board votes on its latest review of the crisis-prone South American nation’s $43 billion program.

A group of Venezuela creditors is seeking funding from JPMorgan Chase & Co. in a $7 billion bid for the parent of Citgo Petroleum Corp., Bloomberg News reported. The group, which includes Canadian miner Gold Reserve Inc., are among a list of claimants that between them have more than $20 billion in judgments against Venezuela for arbitration awards, unpaid debts and defaulted bonds. A district judge in Delaware is leading a process to sell PDV Holding, which controls Venezuela’s most important foreign asset, refiner Citgo Petroleum Corp., in an auction to pay off creditors.

Annual inflation slowed to a 10-year low in Venezuela as the central bank intervenes to prop up the currency, Bloomberg News reported. Consumer prices rose 59% in May from a year earlier, the weakest pace since 2014, the bank said Friday. Monthly inflation eased to 1.5%, from 2% in April. President Nicolas Maduro’s government has sought to help ease consumer price pressure by selling more dollars in the official exchange market and cutting expenses in local currency as he campaigns for a third consecutive term in the July 28 election.

Venezuela’s opposition is ramping up lobbying efforts in Washington, trying to persuade the Biden administration to intervene in the court-ordered sale of Citgo Petroleum Corp.’s parent company in the U.S., Bloomberg News reported. The company is the South American nation’s most important foreign asset and its shares are due to be auctioned by July 15. The opposition fears Nicolas Maduro could blame them for Citgo’s loss ahead of crucial presidential elections set for the end of next month.

Chile’s economic activity fell for the second straight month on declines in mining and commerce, adding to evidence that the jump in growth at the start of the year was short-lived, Bloomberg News reported. The Imacec index, a proxy for gross domestic product, fell 0.3% in April from the prior month, less than the -0.6% median forecast in a Bloomberg survey. From a year ago, activity gained 3.5%, the central bank reported on Monday. Chile’s economy is slowing down this quarter after gross domestic product jumped by the most since 2021 at the start of the year.

Brazilian airline Gol announced on Friday that its board elected Eduardo Gotilla as its new chief financial officer, while also posting preliminary results for April including net debt of $4.5 billion as part of the carrier’s ongoing bankruptcy proceedings, Reuters reported. Gotilla was the CFO of power company Light through last January.