MercoPress. South Atlantic News Agency

Soaring commodities pulverized inflation targets in Latam

Peru, Panama, Brazil, Argentina, Chile, Mexico and Uruguay are the Latinamerican countries expected to have the best economic performance in the region during 2008, according to the latest edition of World Economic Prospects from the World Bank.

The report also shows that the region is expected to expand 4.5% in 2008 and 4.3% in 2009 after having reached 5.4% last year. More specifically Panama is set to grow 7.2%, Peru 6.4%, Argentina 5.7%, Chile 5.1%, Brazil and Uruguay 4.5% and Mexico 3.2% Regarding inflation in 2007, the countries which had the lowest indexes were Ecuador, 2.7%; Mexico, 3.8% and Peru, 3.9%. Following on the list are Brazil, 4.2%; Colombia, 5.2%; Panama, 5.3%; Dominican Republic, 6.9%; Chile, 7.4% and Uruguay, 8.1%. The countries with the highest inflation, Venezuela, 22.5% (compared to 17% in 2006); Bolivia 10.5%; Costa Rica 9.8%; Argentina 8.5% and Paraguay 8.8%. The soaring prices of commodities and energy have had a significant inflationary impact on Latinamerican economies, be it those rich in oil and gas, or those with abundant agricultural production. The consumer prices indexes have been distorted by the increasing food and energy prices with virtually all countries having overshot their original targets. A similar scenario is expected in 2008 with oil in the range of 95 US dollars the barrel and basic commodities such as wheat, corn, soybeans, barley at historic record prices.