💥 💥Political and economic panorama in Latin America in February 2022

The following is a quick overview of what is happening in Latin America and that is useful for corporate and political decision-making, and which is framed in the ravages of the most recent omicron variant, the same one that will clearly leave its mark on the economic reactivation of region.

Some keys that allow a better understanding of what is happening sociopolitically in the region are given by the latest electoral processes, constant changes in the teams of  ministers, and bilateral agreements considered unpopular in terms of economic matters.

💥Concerning ties between Russia and Latin America in regards of the current conflict between Ukraine and Russia

Argentina

Argentine President Alberto Fernandez reached an agreement with the International Monetary Fund with the purpose of renegotiating the Argentine debt for an amount of USD 44,000 million. However, this has generated a series of reactions and controversies.

In fact, Cristina Fernández de Kirchner mentioned that she is dissatisfied with the agreements reached with the international organization, and also denouncing that these would further damage the already diminished Argentine economy.

The nature of the agreement could generate a slight perception of improvement among the population, even though it would not be immediate, and it has already triggered a division in the left-wing congressional bloc.

Máximo Kirchner, president of the ruling party Frente de Todos, presented his resignation, alleging discrepancies with the agreement reached. Other former pro-government congressmen also remarked that his vote will be against the results of the negotiation with the IMF.

This situation does nothing but complicate the approval and execution of the agreement and is, in fact, an issue that is on the media agenda of the gaucho country.

Brazil

Unemployment in Brazil is in a clear process of stabilization, with indicators expected to reach 11.2% by the end of the year, which represents a drop compared to December 2021.

However, these achievements could be overshadowed by the judicial investigation into an alleged network of cyber hackers related to the social environment of the current president Jair Bolsonaro. Part of the task of this digital team, they say, would be to spread fake news.

Chile

The elected president of Chile, Gabriel Boric, has presented his cabinet in the midst of the changes that are being discussed around the Constituent Assembly, and that could reconfigure the socio-economic reality of what was once the most prosperous economy in South America.

On the other hand, the Central Bank announced that foreign investment during the last year was USD 16,782 million, which would represent the best figure since 2015.

On the other hand, Iquique has become a focus of conflict. Unions and citizens have marched to express their protest against the wave of insecurity in the region. They demand greater migratory control at the posts corresponding to the border.

Colombia

The Supreme Court of Colombia, in a truly reprehensible measure, has legalized the abortion of unborn children up to six months. Colombian president, Ivan Duque is horrified and deeply concerned about this measure.

This is happening in the framework of the next elections that has the leftist Gustavo Petro as a favorite.We will need to wait some weeks to know the rest of the presidential candidates to the general elections.

Prices of the main goods and food have increased, affecting the most popular sectors of society.

Ecuador

President Guillermo Lasso traveled to China to renegotiate a debt of $5,176 million and decouple oil from payments. In addition, the State Administration announced the provision of the Investment Law Project, which will be presented to Parliament as an economic emergency.

The legislation, which adds to the tax reforms already approved, will seek to adapt to the stock market, modernize procedures for investors and promote public-private partnerships.

On the other hand, on the economic front, VAT will be reduced by 4 percentage points during the Carnival holiday. That is, it will drop from 12% to 8%. The measure aims to revive tourism.

Mexico

Mexico starts 2022 with a controversial scenario. On April 10, a referendum will be held to revoke the mandate of President Andrés López Obrador. As if that were not enough, elections will also be held in the states

Aguascalientes, Durango, Hidalgo, Oaxaca, Quintana Roo and Tamaulipas. This will elect a new governor, in addition to other elected officials such as city president, councilors and local representatives.

On the other hand, the Spanish government asked President López Obrador to clarify the scope of his statement on the need to suspend relations between the two countries. AMLO declared that his intention was “to respect us, not to see us as a place to conquer. We do want to have relationships with governments around the world, but we don't want them to rob us."

AMLO had to admit that the inflation rate has reached 7.37%, the highest figure in recent times. This is higher than Peña Nieto's 6.7% and Felipe Calderón's 6.5%. The growth of the INPC is driven by the growth of processed foods, raw materials and livestock products.

Paraguay

The Minister of the Interior, Arnaldo Giuzio, filed a 30-page complaint against former President Horacio Cartes before the Secretariat for the Prevention of Money Laundering or Asset Laundering. This is due to alleged conduct of punishable money laundering Smuggling, illicit enrichment and false statements.

On the economic front, the document noted that it lowered its GDP growth forecast for 2022 to 0.5%, compared to a previous forecast of 3.0%. The decrease is due to a possible drop in soybean yields due to drought, although the price of the type is higher than expected this year.

The document indicates that weather reports point to extreme drought this year, which could affect the harvest. According to the Minister of Agriculture and Livestock, Santiago Bertoni, soybean production could reach between 6 and 7 million tons, down from a previous estimate of around 10 million tons.

Peru

The Government of President Pedro Castillo is facing a new ministerial crisis with the resignation of Mirtha Vásquez from the Presidency of the Council of Ministers. This comes after revealing alleged acts of corruption committed in the Ministry of the Interior.

In the midst of uncertainty, the president swore in his third ministerial cabinet under Congressman Héctor Valer. However, he had to submit his resignation three days after a series of allegations of family violence were revealed.

The Ministry of Economy and Finance reported that the Gross Domestic Product grew by 13% in 2021, exceeding the pre-pandemic level. Likewise, the projections for 2022 would be for an increase of between 3.5% and 4%.