No other item is as essential to a Mexican dinner table as corn tortillas. But the surge in inflation involving Latin America and other countries means that people like Alicia Garcia, a restaurant cleaner in Mexico City, had to cut back.
A few months ago, 67-year-old Garcia bought a few kilograms of tortillas every day to bring back to her family. Currently her salary is not very high and she limits herself to 1 kilogram (£ 2.2).
“Everything went up here,” she told The Associated Press while standing outside the tortilla shop. “How can I, who earns the minimum wage, afford it?”
Just as inflation isn’t limited to tortillas, and just as prices in the capital have risen by a third over the past year, Mexico alone isn’t. The sharpest price surges of the Latin American generation have made it difficult to suddenly obtain many of the widely consumed local products. The average person is thinking of a more painful struggle in everyday life without seeing any relief.
Due to supply chain bottlenecks associated with the COVID-19 pandemic and government stimulus, countries were already absorbing higher prices. Later, in late February, Russia’s invasion of Ukraine drastically increased fertilizer prices, affecting the cost of agricultural products such as corn. Global fuel prices have also skyrocketed, raising the cost of items transported by truck from the countryside to cities.
In Chile, the annual inflation rate in April was 10.5%, reaching double digits for the first time in 28 years. Colombia’s share reached 9.2%, the highest level in over 20 years. In Argentina, where consumers have dealt with double-digit inflation for years, price increases have reached 58%, the highest in 30 years.
In Buenos Aires, beef enthusiasts, some households are beginning to look for their classic alternatives.
“I’ve never bought pork before. Now we buy it every week and use it to make stews,” said Marcelo Gandolfo, a 56-year-old private guard, in the middle class of Almagro. After leaving the butcher shop in the neighborhood of the class, he said. “It’s pretty cheap, so it makes a difference.”
According to the Argentine Beef Promotion Association, last year the average Argentine consumed less than 50 kilograms of beef for the first time since the first annual data was collected in 1958. For the past few months, prices have “significantly risen above normal,” said Daniel Candia, a 36-year-old butcher.
“I’ve been in this business for 16 years and this is the first time I’ve seen something like this,” he said.
World Bank Governor David Malpass said in an online conference Thursday that Latin America as a whole is suffering from “a sudden surge in prices of essentials.” He said energy, food and fertilizer prices have been rising at an invisible pace over the years.
Around the world, central banks are raising interest rates to slow inflation. The Central Bank of Brazil has embarked on one of the world’s most aggressive rate hikes, with inflation surpassing 12%, the fastest pace since 2003. In addition to the factors that are causing inflation in the region, Brazilian produce is expensive due to drought and frost. For example, tomato prices have more than doubled in the past year.
Higher interest rates are the government’s primary tool for combating high inflation. However, raising interest rates carries the risk of weakening the economy enough to cause a recession. Last year, the World Bank estimated that the region’s economy grew 6.9% as it recovered from the pandemic recession. Growth is projected to be only 2.3% this year, according to Malpas.
“That alone is not enough to reduce poverty and develop social dissatisfaction,” he added.
Brazilian newspapers tell readers which foods they can use instead of regular products to further increase their family’s budget. But some items like coffee are irreplaceable — especially in countries that produce more than any other item in the world.
Leticia Batista, a cashier at a supermarket in São Paulo, says ground coffee is so expensive that shoplifters are starting to look at it.
“It breaks my heart, but I told many of them to return the powder,” Batista said in the upscale neighborhood of Pinhalos.
In her own humble neighborhood, the cost of coffee is a “big problem,” she said.
At the higher end of the Java spectrum, 57-year-old engineer Marcelo Ferrara enjoyed espresso every day at a local bakery. Its cost has risen 33% since January to 8 reals ($ 1.60). So he reduced his intake to two every week.
“I can’t afford many of these,” Ferrara said when he swallowed one.
It has been decades since the countries of the region suffered from rising inflation at the same time. Albert Ramos, Head of Latin American Macroeconomic Studies at Goldman Sachs, says the main difference now is that the world economy is much more interconnected.
“Interest rates need to go up, otherwise inflation will run wild and the problem will get worse,” Ramos said. “Government can’t be afraid to spend money. It’s a proven drug that lowers inflation.”
But so far, higher interest rates have provided less of an expectation that inflation will fall significantly in the short term. The International Monetary Fund predicted last month that average inflation in the region, excluding Venezuela, would drop to 10% by the end of the year. According to the IMF’s global economic outlook, this is not well below the 11.6% registered at the end of 2021, more than double the 4.4% expected of developed countries.
“To deal with this, we need relatively strict monetary policy for at least a couple of years,” Ramos said.
So, for now, tightening the belt and not using the consumer’s staple food is likely to be the new norm for the poorest people in the infamous and unequal areas of society. According to a World Bank survey released last month, more than a quarter of Latin America’s population is in poverty and is defined as living on less than $ 5.50 a day.
Sarah Fragosa, a 63-year-old housewife in Mexico City, did not hide her anger at rising prices in an interview at a market stall.
“The poorest people are the worst, but the rich only rise,” said Fragosa, who said she replaced her regular beef purchases with quinoa and oats.
“You’re not used to it, but you have no choice,” she said.
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https://www.vallartadaily.com/inflation-latin-americas-poor-struggle-to-afford-basic-foods/ Poor struggle to buy basic Latin American food