The Inter-American Development Bank, IDB, indicated this Monday that Latin America’s public debt has been reduced and is close to reaching pre-pandemic levels.

According to the organization, public debt has been reduced in the region thanks to the reforms and fiscal adjustments applied.

According to the IDB, “public debt experienced a decrease of 11 percentage points in relation to the Gross Domestic Product (GDP), going from 71 % in 2020, to 66 % in 2021, 62 % in 2022 and 60 % in 2023.”

Although it recommends that countries continue implementing reforms, the IDB estimates that the increase in GDP this year will be 1.6 % and that in 2025 it will rebound to 2 %.

In general terms, the organization points out that the countries of Latin America and the Caribbean have demonstrated “unexpected strength” last year. However, they should not lose sight of factors that may influence the increase in debt, such as the El Niño phenomenon, since it could “lead to a 3% increase in debt as a percentage of GDP in three years.”

The IDB emphasizes the importance of governments working to develop “quality education, encourage small businesses, facilitate access to global markets, attract foreign direct investment and improve the credit market.”

M.Pino

Source: bancaynegocios

(Reference image source: Unsplash+, in collaboration with Getty Images)

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China’s National Development and Reform Commission announced a reduction in retail prices of gasoline and diesel starting this Wednesday. This measure is taken in response to recent changes in oil prices on the international market.

According to the country’s top economic regulator, gasoline prices will experience a decrease of 340 yuan ($47.62) per ton, while diesel will be adjusted by 330 yuan ($46.36) per ton.

In line with the current pricing mechanism, which responds to significant variations in crude oil prices in the global market, this reduction comes after previous announcements by the commission.

On November 7, the price of gasoline had already experienced a decrease of 140 yuan ($19.51) per ton, adding to two additional cuts in October, one of 70 yuan ($9.75) and another of 80 yuan ($11.84).

Additionally, the Chinese government has instructed the country’s major oil companies, including China National Petroleum Corporation, China Petrochemical Corporation and China National Offshore Oil Corporation, to maintain production and facilitate transportation to ensure the stability of fuel supply.

K. Tovar

Source: UniónRadio

(Reference image source: Dawn McDonald)

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The United States Federal Reserve (Fed) opened the door, in its last monetary policy meeting, to a reduction in its balance of assets worth 95,000 million dollars, (equivalent to 87,188 million euros) per month as of summer, according to the recently published minutes of the organization.

During the meeting, no final decision was made, only the options on the table were examined. The central bankers did agree that, given the current situation, the balance sheet reduction should be faster than that which took place between 2017 and 2019.

In this way, most of the meeting participants agreed that it would be convenient to reduce the monthly reinvestments of maturing assets so that the balance sheet shrinks by 60,000 million dollars (55,066 million euros), in the case of Treasury bonds, and 35,000 million (32,122 million euros), in the case of mortgage securitizations.

Central bankers broadly agreed that these limits should come into effect in the next three months, so the start of these reductions could come in June or July.

It is not certain when the final decision will be adopted, but the members of the Fed considered that the process of reducing the balance sheet could take place, at the earliest, at the end of the monetary policy meeting that will take place between May 3 and 4.

In its last meeting, the Fed decided to raise interest rates by 25 basis points, to a target range of between 0.25 % and 0.50 %, while bringing forward several additional hikes during the rest of the year to deal with contain inflation and normalize monetary policy.

Source: dpa

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Jair Bolsonaro, president of Brazil, reported that Petrobras, the state-owned oil company, will initiate a plan of small weekly reductions in the price of fuels. However, the president did not specify quantities, percentages, or terms.

Hydrocarbons have registered a sustained growth in their prices during this 2021 in Brazil, stimulated by the revaluation of oil in the international market, coupled with the loss of the value of the Brazilian real against the dollar.

The rise in diesel during the year is equivalent to 65 % and gasoline in 73 % in the different refineries of the South American country, which had an impact on the final consumer. The increase in fuels has also caused, in a decisive way, the increase in inflation, which has exceeded double digits, currently registering 10.7 %.

Bolsonaro without control over Petrobras

The president of Brazil has complained, on multiple occasions, about the increase in fuel prices, especially forced by the heavy cargo sector or truck drivers, who make up part of the social support of his government and are  now threatening to go on strike as protest measure against the increase in fuels.

On several occasions, Bolsonaro has declared that he does not have the power to manage and “interfere in Petrobas and that he will not control the prices of anything”, although at the same time he recognizes that he is “looking for formulas to change the calculation method.”

After several criticisms of the increase in fuel prices, last February Bolsonaro appointed Joaquin Silva e Luna, general of the army reserve, as Petrobas president. However, the adjustments continued and it is currently expected that the necessary measures will actually be taken to reduce prices.

M. Rodríguez

Source: elcomentario.ucol.mx

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Money transfers to Venezuela have registered a decrease of 55.8 %, as a result of the Covid-19 pandemic that affects the world. This was indicated by the economist Corina Fung, who also stressed that “people who reside in the country and whose income is precarious, have limited their spending to priority consumer goods, such as food or health.

As pointed out by Fung, many Venezuelans depend economically on the contributions made by their relatives from abroad, which is why this economic activity has become very popular in the country.

For 2016, some 78 million dollars entered the nation, for remittances, while for 2019, according to data estimated by Ecoanalítica, they were between 3,500 and 3,700 million dollars.

For this year, it was assumed that some “4 billion dollars will enter Venezuela, but the Covid-19 pandemic and its consequent impact on the labor and economic environment in the reception sites of compatriots, ruined these estimates,” the economist explained.

This fact has a negative impact on the country’s economy and particularly on the beneficiaries because that implies a decrease in consumption, sales, income, payments and higher unemployment.

M. Rodríguez

Source: Finanzasdigital.com

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The e-commerce sector has presented an increase of 3 %, going from 16 % obtained in 2020 to 19 %, which is equivalent to 26.7 trillion dollars. This growth has been driven by traffic restrictions, all of them adopted by different countries to face the pandemic generated by Covid-19, as reported by the United Nations Conference on Trade and Development, UNCTAD.

The highest upward index occurred in South Korea, growing from 20.7 % in 2019 to 25.9 % in 2020. Other notable increases during the same period occurred in the United Kingdom, increasing from 15.8 to 23.3 %; China from 20.7 to 24.9 %; United States from 11 to 14 %, Australia from 6.3 to 9.4 % and Singapore from 5.9 to 11.7 %.

Shamika Sirimanne, director of technology and logistics of the Conference assures: “These statistics show the growing importance of online activities.”

Sirimanne reports that these figures “also point to the need for countries, especially developing countries, to have this information as they rebuild their economies after the Covid-19 pandemic.”

However, the sector has presented setbacks, mainly in companies dedicated to tourism or private transport with strong reductions in their gross value of merchandise.

K.Villarroel

Source: Finanzasdigital

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