Brazil and Mexico Are Playing a Dangerous Inflation Game
As Latin America’s two biggest economies face rising prices, their central banks need to be careful not to cave in to political considerations.
It has one job.
Photographer: Victoria Razo/Bloomberg
Inflation is making a comeback in Latin America — and the region’s two largest economies need to be careful not to let politics interfere with their fight against it.
In recent months, Brazil and Mexico have suffered renewed price pressures, partially reversing the deflationary trend achieved through aggressive monetary tightening in the post-pandemic years. In Brazil, this uptick has taken annual inflation to a five-month high of 4.5%, while the rate reached almost 5.6% in Mexico, a 14-month high. In both countries, the rate is above the 3% level targeted by their central banks.