We begin our tour today in El Salvador, where the government of Nayib Bukele has boasted statistics reflecting a historically low annual homicide rate, with only 114 reported in 2024. The figure does not take into account those alleged criminals who died in confrontations with Salvadoran security forces or the discovery of skeletons. The homicide rate, following the data managed from the “Doctor Manuel Enrique Araujo” mall, is below 2 per 100,000 inhabitants, which would apply to declare El Salvador as “the safest country in the western hemisphere, after having been the most insecure country in the world”, per Bukele. Next March will mark three years since the introduction of an aggressive approach towards the gang phenomenon, which includes a controversial state of exception—disputed by activists and human rights organizations inside and outside the country—as a key component.
We could help… https://t.co/P6VwncUdPw
— Nayib Bukele (@nayibbukele) January 2, 2025
Also in El Salvador, rejection continues of legislation passed by Congress at the end of 2024 reversing the ban on metal mining in the country, given the deteriorating state of the environment there.
Latin American finances: a year review
The Peruvian Central Reserve Bank claims that the sol was “the strongest currency” in the region last year, as it recorded the smallest depreciation against a strong dollar. The exchange rate closed at 3.76 soles, performing a slight appreciation against the 2023 currency exercise. Since 2000, according to the Peruvian monetary authority, the sol is the only currency that has not depreciated at a double-digit rate, with 5.5%, followed far behind by the Chilean peso. Although Peru continues depressed because of an unstable and complex political context, overcharged with allegations of corruption and bad governance, the economy seems to be running on another, safe path, supported by the credibility of the Central Bank's management, the favorable state of international foreign exchange reserves, and the trade surplus. Inflation control is also valued positively in the Andean nation. Other important data on Peruvian finances are available in this cable from Spain's EFE.
In general, notes Reuters, Latin American financials underperformed the rest of the emerging markets, especially regarding the values reflected by key stock indexes, which averaged a drop of about 31%—for the worst annual decline in nine years. For example, in 2024, the Mexican peso experienced its worst performance since 2008, while the main Aztec stock index recorded its sharpest decline since 2018. Although at a very high social cost—for the time being—, Argentine markets perform well at the beginning of the year, fueled by the strong fiscal adjustment program advanced by Milei's Pink House, and expectations of a new agreement with the IMF. Yesterday, the Argentine monetary authority announced a repurchase agreement with five international banks—with bonds introduced by The Freedom Advances administration one year ago—for one billion dollars. From Balcarce 50 they also boast a 206% annual increase in tax collection.
The Venezuelan Government also increased tax collection last year, although only by 49% in a country full of informality. The value of the bolivar fell by nearly 31% in 2024 against the dollar, greatly eroding the purchasing power of Venezuelans. For its part, the Brazilian economy suffered a record flight of dollars in December, with more than 26 billion dollars extracted by investors allegedly worried about the fiscal health of the first South American economy. According to a report by a consulting firm reported by EFE, more than 24 billion dollars were withdrawn from the São Paulo stock exchange alone in 2024. In general, during the last year, there was a negative balance between dollar inflows and outflows—in the financial account—of more than 84 billion dollars in total, according to the monetary authority, while the real depreciated by a little more than 27%. Yesterday, only the Colombian peso was able to maintain its exchange rate against the dollar, gaining 0.77% over the one at the close of trading on Thursday.
Argentina’s state airline cuts staff, routes, passenger perks ahead of possible sale https://t.co/aIqa1fHkDp pic.twitter.com/8FUf6YteaV
— Reuters (@Reuters) January 3, 2025
And this is all for our report today. I have referenced the sources dynamically in the text, and remember you can learn how and where to follow the LATAM trail news by reading my work here. Have a nice day.
