{"id":57876,"date":"2021-05-16T06:13:07","date_gmt":"2021-05-16T11:13:07","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57876"},"modified":"2021-05-16T06:13:07","modified_gmt":"2021-05-16T11:13:07","slug":"spiking-inflation-rate-hikes-and-debt-defaults-in-latin-america","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57876","title":{"rendered":"Spiking Inflation, Rate Hikes, and Debt Defaults in Latin America"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2021\/05\/15\/spiking-inflation-rate-hikes-and-debt-defaults-in-latin-america\/\">Spiking Inflation, Rate Hikes, and Debt Defaults in Latin America<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Mexico and Brazil, having seen the economic destruction that high inflation can wreak, don\u2019t want to see it again.<\/strong><\/p>\n<p>Latin America will soon be hit by a wave of business bankruptcies and defaults,\u00a0<a href=\"https:\/\/www.infobae.com\/america\/agencias\/2021\/05\/12\/economia-cesce-advierte-de-que-pronto-afloraran-crisis-de-impagos-en-america-latina\/\">according to<\/a>\u00a0Jes\u00fas Urdangaray L\u00f3pez, the CEO of CESCE, Spain\u2019s biggest provider of export finance and insurance. CESCE insures companies, mainly from Spain, against the risk of their customers not paying due to bankruptcy or insolvency. It also manages export credit insurance on behalf of the Spanish State.<\/p>\n<p>CESCE\u2019s biggest clients are large Spanish companies with big operations in Latin America. For many of those companies, including Spain\u2019s two largest banks, Grupo Santander and BBVA, Latin America is its biggest market. CESCE\u2019s\u00a0<a href=\"https:\/\/www.icisa.org\/member\/1754\/\">three biggest shareholders<\/a>\u00a0are the Spanish State and, yes, Spain\u2019s two largest banks, Grupo Santander and BBVA.<\/p>\n<p>BBVA, which is heavily invested in Argentina,\u00a0<a href=\"https:\/\/www.lainformacion.com\/empresas\/bbva-argentina-inflacion-alerta\/2835561\/\" target=\"_blank\" rel=\"noopener\">warned<\/a>\u00a0about the worsening situation in the country. If Argentina\u2019s economy continues its inflationary spiral, it could end up affecting BBVA\u2019s overall performance and financial health, the Spanish bank said.<\/p>\n<p>Argentina\u2019s government is once again trying to restructure its foreign-currency debt with the IMF, having already defaulted on the debt once since the virus crisis began.<\/p>\n<p>Ecuador was first to default on its foreign currency debt, followed by Argentina, then Surinam, Belize, and Surinam twice more \u2014\u00a0<a href=\"https:\/\/es-us.finanzas.yahoo.com\/noticias\/seis-impagos-13-meses-mercado-131835823.html\">six sovereign defaults<\/a>\u00a0so far in 13 months.<\/p>\n<p>Latin America has been hard hit by the virus crisis. But the region\u2019s cash-strapped governments with weak currencies and surging inflation\u00a0<a href=\"https:\/\/wolfstreet.com\/2020\/03\/27\/latin-america-was-already-steeped-in-economic-problems-now-come-the-external-internal-shocks-of-covid-19\/\" target=\"_blank\" rel=\"noopener\">cannot afford<\/a>\u00a0to provide the sort of financial support programs being rolled out in more advanced economies. Fiscal response has\u00a0<a href=\"https:\/\/www.economist.com\/the-americas\/2021\/05\/13\/why-latin-americas-economy-has-been-so-badly-hurt-by-covid-19\">added<\/a> just 28 cents of extra deficit spending for every dollar of lost output&#8230;<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Spiking Inflation, Rate Hikes, and Debt Defaults in Latin America Mexico and Brazil, having seen the economic destruction that high inflation can wreak, don\u2019t want to see it again. Latin America will soon be hit by a wave of business bankruptcies and defaults,\u00a0according to\u00a0Jes\u00fas Urdangaray L\u00f3pez, the CEO of CESCE, Spain\u2019s biggest provider of export [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[90,13189,426,431,1176,517,27230,13351,4255],"class_list":["post-57876","post","type-post","status-publish","format-standard","hentry","category-economics","tag-brazil","tag-debt-defaults","tag-inflation","tag-interest-rates","tag-latin-america","tag-mexico","tag-nick-corbishley","tag-price-inflation","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=57876"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57876\/revisions"}],"predecessor-version":[{"id":57877,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57876\/revisions\/57877"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}