Inflation Shock From Ukraine War Threatens Weak Latin Economies

The surge in commodities prices triggered by Russia’s invasion of Ukraine is a “double-edged sword” for Latin American economies, boosting exports, but also hurting consumers and calling forth tighter monetary policy, according to Oxford Economics.

“Rising commodity prices is usually good news for Latin America,” Joan Domene, Oxford Economics Senior Economist, wrote in a report published Friday. “However, soaring prices also threaten the region’s fragile economic recovery as inflation eats away at purchasing power and prompts central banks to tighten policy.”