Connect with us

International

Brazil hikes interest rate as inflation surges

AFP

Brazil’s central bank on Wednesday hiked its benchmark interest rate by a whopping 150 basis points for the second straight time, seeking to fight surging inflation even as Latin America’s biggest economy is stuck in recession.

The increase, the seventh straight, was in line with analysts’ expectations. It brought the Selic rate to 9.25 percent, the highest since mid-2017.

The decision was made unanimously by the nine members of the bank’s monetary policy committee, which said in a statement it expected “another adjustment of the same magnitude” when it ends its next meeting, on February 2.

“It is appropriate for the monetary tightening cycle to advance significantly into the territory of a contraction,” it said.

Advertisement
20260224_estafa_mh_728x90
previous arrow
next arrow

“The committee will persevere in its strategy until not only the process of disinflation but the anchoring of (inflation) expectations in line with its targets are consolidated.”

Policymakers are navigating treacherous waters as they try to right Brazil’s listing pandemic recovery.

The South American giant’s economy is in recession, having contracted by 0.4 percent in the second quarter of 2021 and 0.1 percent in the third.

Despite the slump, the central bank has hawkishly slammed on the monetary policy brakes because of surging inflation, fueled by both global price pressures and Brazil’s own domestic problems.

The annual inflation rate came in at 10.67 percent in October, nearly triple the bank’s target of 3.75 percent.

Advertisement
20260224_estafa_mh_728x90
previous arrow
next arrow

– Spending amendment –

Rapidly rising prices have been driven by a series of factors: internationally, those include global supply chain shortages, increasing oil prices and pandemic uncertainty.

At home, Brazil faces electricity rate hikes caused by droughts that sapped crucial hydroelectric dams, a weak currency and uncertainty around President Jair Bolsonaro’s bid to amend the constitution to free up money in the government’s tight budget for massive social spending.

Critics accuse the far-right president of embracing economic populism with the new spending measures.

But he won a victory Wednesday when Congress adopted a first portion of the spending amendment, enabling the government to postpone court-ordered debt payments.

That will free up 62 billion reais ($11 billion) to spend in 2022, with most expected to go to welfare payments.

Advertisement
20260224_estafa_mh_728x90
previous arrow
next arrow

The economy has turned into a major headache for Bolsonaro heading into elections next October that polls currently place him on track to lose to leftist ex-president Luiz Inacio Lula da Silva.

Double-digit inflation has left many Brazilian families struggling to make ends meet, weighing down Bolsonaro’s already sagging popularity — and driving his bid for new social spending, political analysts say.

Brazil’s unemployment rate has meanwhile been stubbornly high, at 12.6 percent for the third quarter.

Continue Reading
Advertisement
20260224_estafa_mh_300x250

Central America

Argentina Falls to Lowest Rating in Global Workers’ Rights Index Under Milei Administration

Panamanian president consults attorney general to repeal mining contract

Argentina and Panama have joined Ecuador among the world’s 10 worst countries for workers’ rights, according to a report released Monday by the International Trade Union Confederation (ITUC).

The three Latin American nations appear alongside Belarus, Egypt, Eswatini, Myanmar, Nigeria, Tunisia and Turkey in the latest edition of the Global Rights Index, which evaluates the protection of labor rights around the world.

According to the ITUC, Argentina entered the list this year after being downgraded to Category 5, marking its second consecutive year of declining ratings.

“Argentina joins the list of the 10 worst countries for workers this year after falling to Category 5, following a second consecutive year of deterioration in its rating,” the organization stated.

The report argues that working conditions and the environment for trade unions have become increasingly restrictive under the administration of President Javier Milei.

“Conditions for workers and trade unions have become increasingly repressive and hostile under the far-right government of President Javier Milei,” the study said.

The ITUC also highlighted Argentina’s implementation of an anti-blockade protocol aimed at maintaining public order during road blockades. According to the report, the measure authorizes what it describes as the indiscriminate use of police force.

The organization noted that Argentina’s rating has worsened for a second consecutive year, placing the country in Category 5, the lowest level assigned in the index and the worst rating Argentina has ever received.

“This represents an abrupt and unprecedented decline from Category 3 to Category 5 in just two years,” the report stated.

Category 5 includes countries where workers’ rights are considered “not guaranteed.” According to the ITUC, the downgrade reflects a shift from recurring labor rights violations to a situation in which workers are no longer assured basic protections.

The annual index assesses issues such as freedom of association, collective bargaining rights, the right to strike and legal protections for workers and trade unions.

The report’s findings place renewed international attention on labor conditions in several countries, particularly in Latin America, where Argentina, Panama and Ecuador now rank among the most challenging environments for workers’ rights.

Continue Reading

International

OAS Election Mission to Monitor Claims of Political Interference by Colombia’s President

The Electoral Observation Mission of the Organization of American States (OAS) has pledged to follow up on allegations regarding the alleged involvement of Colombian President Gustavo Petro in political campaigning ahead of Sunday’s presidential election.

The announcement was made by presidential candidate Claudia López after a meeting with the head of the OAS Electoral Observation Mission, former Dominican Republic President Leonel Fernández.

According to a statement released by López’s campaign, the OAS mission listened to the concerns raised by the candidate and committed to monitoring the complaints she has submitted to both national and international organizations.

The mission also reiterated its commitment to overseeing the electoral process to help ensure that the will of Colombian voters is respected throughout the election.

“We have turned to international forums and technical observation missions to warn that Colombian democracy cannot be left at the mercy of fear or undue pressure,” López, the former mayor of Bogotá, said following the meeting.

López has repeatedly expressed concerns about what she describes as political interference in the electoral process and has called on national and international institutions to closely monitor the conduct of the campaign.

The OAS observation mission is one of several international bodies deployed to Colombia to monitor the presidential election, which is taking place amid heightened political tensions and intense competition among candidates from across the ideological spectrum.

The election is expected to be closely watched both domestically and internationally as Colombians choose whether to continue with the country’s first left-wing administration or shift toward a new political direction.

Continue Reading

International

Colombia Votes in Pivotal Election as Left Seeks to Retain Power

Colombians headed to the polls on Sunday in a crucial presidential election that will determine whether the country continues under its first left-wing government in modern history or shifts back toward the political right.

The election campaign has been marked by deep political divisions, with armed violence and economic concerns emerging as the dominant issues for voters.

A total of 11 candidates remain in the race following the withdrawal of three presidential tickets. The central question is which candidate will advance to a likely runoff election alongside ruling-party senator Iván Cepeda, who has led opinion polls for months with his platform of “democratic revolution” but is not expected to secure enough votes to win outright in the first round.

On the right, Senator Paloma Valencia of the Democratic Center party, the political movement founded by former President Álvaro Uribe, has lost momentum as support has grown for far-right attorney Abelardo de la Espriella. Known as “The Tiger,” De la Espriella has campaigned on a tough-on-crime agenda targeting criminal organizations and guerrilla groups, drawing comparisons to the security policies of Salvadoran President Nayib Bukele.

Political analyst Sandra Borda, a professor at the University of the Andes, argues that Colombia is experiencing not simply greater polarization but a broader political landscape.

“The 2016 peace agreement with the FARC opened significant space for the left. Inevitably, it also created opportunities for the right,” Borda told CNN. The political scientist, who ran for the Senate in 2022 with the New Liberalism movement, believes the current election presents a more challenging environment for the left than four years ago.

According to Borda, left-wing candidates can no longer campaign solely as agents of change who have never had the opportunity to govern or who remained untouched by traditional politics.

“They can no longer make that argument. They have already governed and are no longer immune from criticism associated with political power,” she said.

The election is being closely watched across Latin America as voters weigh the record of the outgoing administration against promises of change from candidates across the political spectrum.

Continue Reading

Trending

Central News