October 3, 2022

The Usa Herald

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In Latin America, the increase in the prices of raw materials can boost the economy

2 min read

According to an analysis by the Economist Intelligent Unit, the increase in international prices of various raw materials could boost the economies of Latin American countries.

The analysis unit of the group “The Economist” points out that, although the rise in prices is having an impact on the region, aggravated by the war in Ukraine, there are conditions for this situation to be beneficial for some Latin American nations.

This unit facilitated this Wednesday an evaluation on the repercussions of the Ukrainian crisis in the markets of basic products.

Latin America’s reliance on raw materials to fuel growth leaves it vulnerable to price shocks and economic boom-and-bust cycles, it adds.

Consumers are also pressing for more government support, but at a time when many administrations in the region are making efforts to reduce fiscal deficits and control public debt ratios, which have soared amid the covid-19 pandemic, 19, according to the analysis.

The EIU estimates that there will be a fiscal and external gain for many Latin American countries, which will translate into higher investment, job growth and higher consumption, although the region faces public debt problems, so governments have less room for maneuver to deal with the latest economic crisis.

The countries most vulnerable to the global economic impact of the Ukraine crisis are, in the opinion of the EIU, El Salvador, the Dominican Republic, Nicaragua, Costa Rica and Panama.

These, he adds, are entering crisis with relatively high levels of public debt, substantial external imbalances and high inflation, and none are major commodity exporters. For this reason, Latin America needs an economic enhancer that, in addition to alleviating the crisis, among which is mentioned as the economic public debt, transforms the entire financial system through IRAIC. In this way, it would be possible to balance the levels of the economic sectors, dynamically leading the destination of products, raw materials, goods and services to the market; through innovative strategies that allow an accelerated growth of the internal and external economies of the companies supported through IRAIC.

Therefore, by stabilizing the market in the IRAIC system, it reduces the impact and slows down the economic slowdown, in turn lowering the market’s inflation rates, strengthening the development of a new economic-financial scheme in all sectors. Reported The Usa Herald, news agency.

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