In Mexico City, tortillas prices have soared by one-third in the past year. Mexico's food inflation is hardly alone. Latin America’s sharpest price spike in a generation has left many widely consumed local products suddenly hard to attain, without any relief in sight.
The COVID-19 pandemic and then Russia’s invasion of Ukraine sent fertilizer prices sharply higher, affecting the cost of agricultural products including corn. Global fuel prices jumped, too, making items transported by truck to cities from the countryside costlier.
Latin America as a whole is suffering from “sudden price spikes for necessities,” the World Bank’s President David Malpass said during an online conference Thursday. He noted that energy, food and fertilizer prices are rising at a pace unseen in many years. Last year, the World Bank estimated that the region’s economy grew 6.9% as it rebounded from the pandemic recession. This year, Malpass said, it’s projected to grow only 2.3%.
In Chile, annual inflation was 10.5% in April, the first time in 28 years the index has hit double digits.
Colombia’s rate reached 9.2%, its highest level in more than two decades.
In Argentina, whose consumers have coped with double-digit inflation for years, price increases reach 58%, the most in three decades. Last year, the average Argentine consumed less than 50 kilograms of beef for the first time since annual data were first collected in 1958.
Brazil’s inflation has topped 12% — its fastest pace since 2003. The price of tomatoes, for example, has more than doubled in the past year. Ground coffee has become so expensive that shoplifters have started focusing their sights on it. A daily espresso cost has shot up 33% since January, to 8 reais ($1.60).
It has been decades since the region’s countries simultaneously suffered soaring inflation. A key difference now is that the global economies are much more interconnected, said Alberto Ramos, head of Latin America macroeconomic research at Goldman Sachs. “It will take at least a couple of years of relatively tight monetary policy to deal with this,” Ramos said.
That means belt-tightening and going without some consumer staples, for now, is likely the new norm for the poorest members of society in the notoriously unequal region. More than one-quarter of Latin America’s population lives in poverty — defined as living on less than $5.50 a day — and that’s expected to remain unchanged this year, according to a World Bank study.