International

Rising Argentine inflation ends 2021 over 50%

AFP

Argentine inflation continued to rise in 2021, ending the year at more than 50 percent, the state statistics institute said on Thursday,

It was grim news for the South American country, given cumulative inflation in 2020 — a year when the economy was almost paralyzed by the Covid-19 pandemic — was just 36 percent.

The largest price increases in 2021 were in hotels and restaurants (65.4 percent), transport (57.6) and food (50.3).

“During 2021, the government tried to anchor inflation and to do so basically used the regulation of the price of utility rates and the exchange rate,” Hernan Fletcher of the Argentine Center of Economic Policy, told AFP.

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“Although it certainly was not a success, without this, inflation would have been higher.”

Since 2019, Argentina has imposed ever stricter currency exchange controls, meaning citizens can only withdraw $200 a month at the official rate.

For 2022, the government predicted in its budget — which was rejected by the opposition-dominated parliament — an inflation of 33 percent.

Opposition figures derided the budget as unrealistic.

According to a Central Bank survey, inflation in 2022 will be 55 percent.

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The news comes with the government embroiled in a tricky renegotiation with the International Monetary Fund (IMF) over the repayment structure of a $44 billion loan agreed in 2018.

Argentina is due to pay back $19 billion to the IMF this year, another $20 billion in 2023 and $4 billion the following year.

Yet analysts estimate that the country has just $4 billion in international reserves.

“A deal with the IMF could improve the economy in terms of expectations, but in terms of inflation I don’t see 2022 being very different to 2021,” said economist Pablo Tigani.

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International

Air Canada suspends JFK flights amid soaring fuel costs linked to Iran conflict

Air Canada announced on Friday that it will suspend its flights from Montreal and Toronto to New York’s John F. Kennedy International Airport from June through late October, citing rising jet fuel costs driven by the conflict involving Iran.

“Since the beginning of the conflict with Iran, some routes and less profitable flights have become economically unviable, so we are making adjustments accordingly,” the airline said in a statement.

Despite the suspension, the carrier confirmed it will continue operating 34 daily flights from six Canadian cities to New York’s LaGuardia Airport and Newark Liberty International Airport.

Air Canada expects to resume its JFK operations after October 25.

Meanwhile, Iran announced the reopening of the Strait of Hormuz amid a temporary ceasefire in the region. However, jet fuel shortages could persist even if the truce holds.

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Fuel accounts for between 25% and 30% of operating costs for most airlines, and carriers worldwide have responded to the crisis by raising fares and suspending select routes due to safety and profitability concerns.

International

UK braces for potential CO₂ shortage amid Middle East tensions

The government of United Kingdom is preparing contingency measures amid fears of a potential shortage of carbon dioxide (CO₂), which could impact the agri-food industry if the Strait of Hormuz remains blocked due to the ongoing conflict in the Middle East, The Times reported on Thursday.

According to the newspaper, officials assessed this scenario during a recent crisis meeting aimed at evaluating the consequences of a prolonged conflict, triggered on February 28 by joint attacks from United States and Israel against Iran.

Under this scenario, CO₂ supplies—primarily a byproduct of fertilizer production using natural gas—could fall by up to 18%, affecting multiple sectors including agriculture and food production.

The gas is widely used in the slaughter of pigs and poultry, as well as in extending the shelf life of packaged foods. Breweries could also face disruptions due to reduced availability.

“I don’t want to comment on a leak, but now that the information is out there, I hope people feel reassured knowing we are working on it,” said Peter Kyle, Secretary of State for Business and Trade, in remarks to Sky News.

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While a drop in CO₂ supply is not expected to cause major shortages in supermarkets, it could limit product variety, The Times noted, citing access to internal government documents.

To mitigate the impact, authorities are considering prioritizing CO₂ supply for critical sectors such as healthcare and civil nuclear energy, where it is used in cooling systems for blood reserves, organs, vaccines, and electricity generation. The government may also request domestic producers to increase output.

Central America

El Salvador and Paraguay approve 2026–2028 cooperation program

The governments of El Salvador and Paraguay approved the 2026–2028 Cooperation Program, which includes six joint development projects, according to Salvadoran Vice Minister of Foreign Affairs Adriana Mira.

Mira stated that El Salvador will act as the “main provider of cooperation,” contributing five initiatives focused on road infrastructure, tourism, and local development. She also noted that one of the projects will be led by the Paraguayan side, although no further details were disclosed.

The agreement was reached during the Second Meeting of the Joint Commission on Technical and Scientific Cooperation between both countries.

According to Paraguay’s Ministry of Foreign Affairs, the First Meeting of the Political Consultation and Bilateral Coordination Mechanism was also held, with the participation of Vice Minister Víctor Verdún.

In an official statement, the Paraguayan government reported that both delegations agreed to identify mechanisms to promote competitiveness, economic growth, and market access. They also committed to signing agreements related to air transport cooperation.