Eleven Latin American countries announce plan to tame inflation

The leaders of 11 Latin American nations, including its two biggest economies, Brazil and Mexico, have announced a plan to work together to address rampant inflation.

The initiative was unveiled on Wednesday after a virtual meeting convened by Mexican President Andres Manuel Lopez Obrador.

He said the aim was to give people access to “food and basic products at better prices” through steps such as removing import tariffs and other trade barriers.

The priority is to reduce “the cost of these products for the poorest and most vulnerable,” according to a statement released after the talks, which also included the leaders of Argentina, Belize, Bolivia, Chile, Colombia, Cuba, Honduras, Venezuela and Saint Vincent and the Grenadines.

Like other parts of the world, Latin America is suffering from elevated inflation blamed partly on shortages linked to Russia’s offensive in Ukraine and the coronavirus pandemic.

Inflation for the whole region ended 2022 at 14.8 percent, according to the International Monetary Fund, and hit around 95 percent in Argentina — the highest in more than 30 years.

Although the pace of consumer price increases has moderated recently in some countries such as Mexico, Lopez Obrador warned that inflation remained “a threat.”

The leaders agreed to create a working group made up of government representatives from each country to determine cooperation measures, particularly in the area of fertilisers — one of the products most affected by the Ukraine conflict.

If the countries find a way to boost supplies within the region, “it will undoubtedly be beneficial,” Cesar Salazar, an expert at the National Autonomous University of Mexico’s Institute of Economic Research, told the AFP news agency. 

“The big challenge is that Latin American economic integration is certainly very weak,” he said, noting that Mexico has close trade links with the United States, and Brazil with China.

Lopez Obrador invited the leaders to a summit on May 6-7 in the Mexican beach resort of Cancun to discuss the issue further.