Mexico Eliminates Fuel Tax; Peru Raises Interest Rates

A roundup of Friday’s news from across Latin America

Bloomberg Línea
March 12, 2022 | 12:31 AM

Bloomberg Línea — Mexico’s government has exempted gasoline and diesel from the production and services tax “to avoid abrupt increases in prices to the public” amid the hike in global oil prices.

Peru’s central bank has raised the benchmark interest rate for the eighth consecutive time by 50 basis points, from 3.50% to 4%, in what the bank called the continuation of the “normalization of Peru’s monetary policy”. Growth for January was estimated at 1.72%.

Chile’s new president Gabriel Boric was sworn-in on Friday, and who at age 36 is the youngest in the country’s history.

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On the stock markets, Chile’s Ipsa (IPSA) index had the best performance in Latin America, closing the day with an increase of 0.53%, while Brazil’s Ibovespa (IBOV) had the region’s worst performance on Friday, closing with a drop of 1.72%

Following is a roundup of Friday’s news from Bloomberg Línea and Bloomberg reporters across Latin America.

Argentina:

As Argentina’s Congress approved the latest deal struck with the International Monetary Fund (IMF) in the renegotiation of its debt, the deal has come in for criticism from economic analysts as a “light” deal that will not prove effective. Economist Miguel Kiguel says the fiscal deficit goals set out in the IMF’s “light” deal with Argentina were achievable before the outbreak of the war in Ukraine

Congress’ passing of the bill of the agreement renegotiating the country’s debt with the International Monetary Fund (IMF) was aided by the government’s alliance with the opposition coalition Juntos por el Cambio (Together for Change).

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Pampa Energía, one of Argentina’s largest private energy companies, reported a net profit of $38 million in the fourth quarter of 2021, achieving a recovery against its loss of $551 million in the same period of 2020. It also announced it will be exporting gas to Chile.

Brazil:

An XP/Ipespe survey released Friday gives President Jair Bolsonaro enough support to pass into the second round of elections. Voting intentions for Bolsonaro are around 25%, but for former president Lula around 40%.

Inflation in Brazil is exceeding forecasts with the impact of war in Ukraine. The CPI registered an increase of 10.54% in February, with a monthly increase of 1.01%, statistics agency IBGE reported Friday.

Chile:

Gabriel Boric took office as President of Chile on Friday and will face multiple challenges in his four-year term, according to analysis by Bloomberg Línea.

Colombia:

Colombian drugstores will begin selling Covid-19 home testing kits, following approval from the Ministry of Health.

Presidential candidate Gustavo Petro, of the leftist Colombia Humana party, and currently the leader in all polls, traveled to Chile to attend the investiture of President Gabriel Boric, and met with several members of the new Chilean cabinet. Colombian President Iván Duque did not attend.

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Ecuador:

State-owned Petroecuador adjusted downward its oil production target to 804,323 barrels by 2026, down from the projection just a few months ago of one million barrels of crude oil per day.

El Salvador:

El Salvador will eliminate import tariffs on 20 basic food products amid high inflation and the effects of the war in Ukraine. The country will also simplify the import process for suppliers from 67 countries, including Mexico, Brazil, Argentina, Chile and Colombia.

Mexico:

The government has exempted gasoline and diesel from the production and services tax “to avoid abrupt increases in prices to the public”.

Panama:

Panamanian banks overcame the economic debacle caused by the pandemic through financial relief programs to debtors, which in 2021 helped to reduce tat portfolio by 59%, and which amounted to some $9.25 billion.

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Peru

The central bank has raised the benchmark interest rate for the eighth consecutive time by 50 basis points, from 3.50% to 4%, in what the bank called the continuation of the “normalization of Peru’s monetary policy”. growth for January was estimated at 1.72%.

Uruguay:

Uruguay is seeking to import Paraguayan meat in order to reduce retail prices in the local market, which have already increased by 25% since January.