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Inflation: Argentina and Venezuela record the highest figures in Latin America
May 13 , 2021

Carlos Parodi analyzes the situation in Latin America, where Argentina recorded a 44% inflation rate versus Peru, which reached 2%.

Inflation in Argentina eased slightly in February compared to December and January; however, it continues to be the highest in the region, second only to Venezuela. 

Although the dollar has remained stable against the Argentine peso, experts indicate that the unfreezing of some price control programs, the fiscal deficit, which this year is expected to reach 4 % of GDP, and the economic situation that the country has been dragging along for several years have contributed to these high inflation indicators. 

"Because of excessive monetary emission combined with price controls. In economics, many measures that sound good for the population, end up harming the most vulnerable. Peru experienced this in 1985-90," said Carlos Parodi, professor at the School of Economics and Finance of Universidad del Pacífico. 

With February's number, only Venezuela would have surpassed Argentina, once again. The country governed by Nicolás Maduro registered an inflation rate of 2655% in the last year, according to the Central Bank, although private estimates place the figure above 3000 percent. In any case, this is a hyperinflationary record.

Inflation in Peru will reach 2% in 2021 
In 2020, marked by the economic and health crisis caused by the coronavirus, Peru reported a total inflation rate of 2.4%, according to information gathered from private consulting firms by the Infobae news portal. Our country registered an inflation rate of 0.1% last January and it is estimated that by 2021, this figure will increase to 2%. 

"The inflation rate for 2021 is estimated between 2.5% and 2.7%, within the BCR's target of an annual inflation rate between 1% and 3%," said Parodi.

Thus, Peru is in eighth place, one of the lowest positions in this ranking with projections for the current year, largely as a result of the work of the Central Reserve Bank of Peru (BCRP). 

"Thanks to an independent BCRP that is managed with technical and not political criteria. The BCRP is prohibited from issuing money to lend to the Ministry of Economy and Finance, as well as from creating development banks and establishing multiple exchange rates. This combination of factors has allowed monetary stability, which has become the main strength of the Peruvian economy", concluded the economist.

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