War in Ukraine to slow economic growth and drive up inflation in Latin America: Moody’s

Economic growth in Latin America will slow this year due to Russia’s invasion of Ukraine, Moody’s Investors Services forecasted, quoted by Uruguayan daily El Pais. The rating agency pointed out that despite the limited trade between the continent and the two countries, the war may result in further inflationary pressure, which will have a negative impact on Latin America’s economies.

Higher energy prices and supply chain disruptions, caused by the war, restrict access to agricultural and industrial raw materials, which will lead to a significant hike in inflation in the region and a more restrictive monetary policy, the credit rater explained. The Senior Vice President of Moody’s Gersan Zurita expects inflationary pressures in Latin America to ease in the second half of the year.

On the positive side, the rating agency considers that Latin America’s financial institutions won’t be significantly affected by Western sanctions imposed on Russia.

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