Latin America Rising > Argentina's exports hit record high; Lula triggers global market sell-off

 

Argentina's exports hit record high in September

By Banyeliz Muñoz

An aerial photograph taken with a drone shows a cargo ship belonging to Chinese automaker BYD docked at the Port of Zarate, Argentina, in January. Argentina posted a $2.98 billion trade surplus in September as exports exceeded $10 billion for the first time, File Photo by EPA

BUENOS AIRES, Oct. 20 (UPI) -- Argentina posted a $2.98 billion trade surplus in September as exports exceeded $10 billion for the first time, driven by rising energy sales, according to official data.

The surplus was $2.04 billion higher than in September 2025, according to the foreign trade report released Monday by the National Institute of Statistics and Census, known as INDEC, Argentina's official statistics agency.

The result marked Argentina's 34th consecutive month of trade surpluses.

From January through September, Argentine exports totaled $77.27 billion, up 21.6% from a year earlier, while imports fell 2.5% to $56.07 billion. The cumulative trade surplus reached $21.2 billion, compared with $6.05 billion during the same period in 2025.

Fuel and energy exports reached $1.78 billion in September, an 89.1% increase from the same month in 2025. During the first nine months of 2026, exports from the sector rose 53.6% year over year, according to the official report.

Argentine President Javier Milei attributed the energy sector's performance to deregulation measures introduced by his administration and increased oil and gas production at Vaca Muerta, a geological formation in Patagonia that holds substantial hydrocarbon reserves and accounts for much of the country's energy expansion.

"For a decade, Vaca Muerta operated at half capacity, with suppressed prices, currency controls and fear of investing. When we changed the rules, in less than three years, we began exporting like never before," Milei said during the Argentina Oil & Gas Patagonia 2026 exhibition.

According to figures presented by Milei, oil production at Vaca Muerta rose from an average of about 310,000 barrels per day in 2023 to more than 670,000 barrels per day in August 2026. Nationwide, production increased from about 635,000 barrels per day in 2023 to 932,000 barrels per day in August.

"Today, for the first time in history, we are just steps away from producing 1 million barrels per day," Milei said.

The president also highlighted growth in oil exports. He said Argentina exported an average of 128,000 barrels per day in 2023, a volume that doubled in 2026.

Milei defended the removal of domestic crude oil price controls as one of his administration's first measures to stimulate energy production.

Juan José Carbajales, a lawyer and former undersecretary of hydrocarbons, told UPI that the main factor behind the increase in energy export revenue was the international price of oil, which remained above $100 per barrel for six months.

"Crude oil prices explain much of this result. There has not yet been a significant increase in export volumes because transportation capacity still needs to be expanded," Carbajales said.

He said the Vaca Muerta Sur oil pipeline, scheduled to begin operations by the end of this year, would allow Argentina to increase oil shipments abroad.

He estimated that the impact would become apparent in February or March, when the new infrastructure would make it easier to transport larger volumes of crude oil from production fields to export terminals.

Carbajales said the results also benefited from increased sales of petroleum products, including liquefied petroleum gas, or LPG, and natural gas shipments to neighboring countries through pipelines.

However, he emphasized that international crude oil prices were the main factor behind the increase in energy export revenue.

Regarding liquefied natural gas, or LNG, which allows natural gas to be transported by ship after being cooled into liquid form, Carbajales estimated that its impact on Argentine exports would begin to emerge toward the end of 2027.

Outside the energy sector, exports of manufactured industrial goods rose 23% from January through September. Exports of primary products increased 14.5%, while agricultural manufactured goods rose 14.3%.

In trade by country, China overtook Brazil in September as Argentina's largest trading partner.

Argentine exports to China totaled $986 million, up 23.8% from a year earlier, while imports from China reached $1.82 billion, resulting in a bilateral trade deficit of $831 million.

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Lula's re-election in Brazil triggers global market sell-off

By Macarena Hermosilla

President of Brazil Luiz Inacio Lula da Silva re-election to a fourth term marked a sell-off in the markets. File Photo by John Angelillo/UPI | License Photo

BRASILIA, Brazil, Oct. 26 (UPI) -- The re-election of Luiz Inácio Lula da Silva to an unprecedented fourth term as Brazil's president triggered a sharp sell-off in Brazilian and international financial markets Monday.

Brazilian assets plunged as investors reacted to an unexpected election outcome after betting on a victory by conservative candidate Flávio Bolsonaro, who had promised strict fiscal austerity measures.

Brazil's benchmark Ibovespa stock index fell 10% at the start of trading, forcing the São Paulo stock exchange to halt operations for 30 minutes. It was the first such suspension since March 2020, when the COVID-19 pandemic began.

Hours later, after trading resumed, the index was down about 15.81%.

Lula's victory upended market expectations. Most polls published in recent weeks had shown Bolsonaro leading ahead of the runoff election following his surprise first-round victory.

Historical precedent also favored Bolsonaro. No candidate who finished second in the first round had previously managed to reverse the result in a runoff.

Lula's comeback victory, with 51.4% of the vote, surprised investors, who are now assessing the potential effects of his new term on interest rates, exchange rates, stocks and public finances, Brazilian news outlet G1 reported.

The reaction was equally severe in currency markets.

The U.S. dollar climbed above 5.60 Brazilian reais, gaining more than 12% from Friday's close. The Brazilian currency, which had benefited from expectations of a Bolsonaro victory, depreciated sharply.

The sell-off extended to Wall Street, where major Brazilian companies trade through American depositary receipts, or ADRs.

Before Brazil's stock market opened, the iShares MSCI Brazil ETF, known as EWZ, which tracks shares of major Brazilian companies and trades in the United States, plunged as much as 26.74%. Meanwhile, the real lost more than 10% in futures contracts traded in Chicago. Similar signs of market panic appeared on Japanese exchanges hours earlier.

Economic analysts at institutions including JPMorgan and ING said investors were reacting to the lack of clarity surrounding Lula's fiscal proposals during the campaign, Argentine newspaper La Nación reported.

Public finances remain the "Achilles' heel" of Brazil's economy because of structural budget constraints. About 80% of government spending is allocated to mandatory expenditures, including pensions and social security, leaving authorities with extremely limited fiscal flexibility.

Lula da Silva's new government faces the difficult challenge of balancing increased spending on social programs with public debt at a historic high of 82.9% of gross domestic product. Debt has resumed its upward trajectory following the introduction of extensive subsidy and financial assistance packages by the government during the election campaign.

The administration will also face immediate pressure to address public discontent over high food prices and declining purchasing power amid a sharp economic slowdown and elevated interest rates that are restricting private-sector lending.

To advance potential economic reforms and implement new tax measures, the leftist president will have to negotiate with a predominantly conservative Congress closely aligned with Bolsonaro.

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Latin America Rising > Chile leading the way in economic freedom; Lula buys Brazilian votes with shorter work-week

 

Chile rises to 20th in economic freedom ranking, leads Latin America

By Francisca Orellana

Oct. 14 (UPI) -- Chile ranked as Latin America's freest economy in the 2026 Economic Freedom of the World report published by Canada's Fraser Institute, climbing six places from the previous edition to 20th among 165 countries and territories.

Chile overtook Costa Rica for the first time to become the region's highest-ranked economy.

The report assesses how institutions and policies allow individuals to make their own economic decisions, including working, conducting transactions, starting businesses and using their property. It measures five areas: size of government, legal system and property rights, sound money, freedom to trade internationally and regulation.

Although published in 2026, the report uses data from 2024. Hong Kong topped the global ranking, followed by Switzerland, Singapore, New Zealand and the United States.

"Where people are free to pursue their own opportunities and make their own economic choices, they lead more prosperous, happier and healthier lives," said Matthew Mitchell, a senior fellow at the Fraser Institute and co-author of the report.

The study links greater economic freedom to higher incomes and longer life expectancy, although it cautions that these associations do not, by themselves, establish causation.

Chile tied with Malta for 20th place, just behind Germany in 19th and Canada in 18th. It also ranked ahead of Spain in 24th, Sweden in 33rd, France in 39th and Italy in 47th.

Chile's improvement was driven primarily by monetary stability, where its score rose from 8.58 to 9.18 points, lifting the country from 59th to 44th place in that category.

Economist Michele Labbé, a faculty member in economics, business and government at San Sebastián University, said average annual inflation fell from 7.3% in 2023 to 3.9% in 2024, improving conditions for economic activity.

"There was greater control over inflation, and that is always good news for a country because it allows investments to be planned," she told UPI.

According to Labbé, price stability makes it easier for businesses to make investment decisions.

"When inflation is not under control, it is difficult to set prices, and when it is difficult to set prices, it is difficult to conduct economic activity. That is how the result should be interpreted," she said.

Labbé noted that Chile's economic conditions improved compared with 2023 but remained below their 2018 levels.

Economist Felipe Cerda, director of the MBA program and academic director of business engineering at Universidad Mayor, agreed that the improvement reflected the effects of the Central Bank's restrictive monetary policy following fiscal expansion and external shocks during the COVID-19 pandemic.

Chile also improved its ranking in the size of government, legal system and property rights categories.

Cerda linked those gains to reduced uncertainty following the conclusion of Chile's constitutional reform processes, which resulted in voters rejecting proposed new constitutions in 2022 and 2023.

"As the existing constitution becomes firmly established, risks such as legal uncertainty diminish, which is a fundamental factor, for example, in long-term investment decisions," he told UPI.

Labbé cautioned that Chile's rise in the ranking reflected both improvements in its own performance and changes in other economies.

While Guatemala recorded smaller gains than Chile, Costa Rica and Panama posted weaker results than in the previous year.

Costa Rica lost its position as Latin America's leading economy, falling from 14th to 28th place.

According to Cerda, the Central American country recorded declines in four of the five categories, particularly in international trade and the legal system and property rights.

He cited administrative obstacles, protectionist pressures and difficulties in productive sectors as possible contributing factors.

"Costa Rica experienced a significant deterioration in its legal system and property rights, along with a 10% increase in tariffs that did not previously exist, making it less competitive," Labbé said.

Cerda also pointed to difficulties in productive sectors and administrative requirements, including environmental impact assessments that can act as recurring non-tariff barriers and undermine economic activity.

Other Latin American countries ranked considerably lower. Panama placed 34th, followed by the Dominican Republic in 40th, Peru in 45th, El Salvador in 58th and Uruguay in 59th. Argentina ranked 151st, while Venezuela finished last worldwide.

The report concluded that global economic freedom began recovering in 2024 but had not returned to pre-pandemic levels. Latin America and the Caribbean remained the region furthest behind in that recovery.

"Latin American economies still face serious problems with property rights and public policies," Labbé said. "Although there is great diversity across Latin America, and Venezuela obviously has a major impact at the bottom of the ranking, the region has lagged for many years because of its public policies, particularly tariffs, restrictions on international trade, very rigid regulations and a lack of inflation control."

Cerda attributed differences among Latin American economies to legal uncertainty and obstacles to investment.

"Countries in the region live in a state of constant tension, transmitting legal uncertainty to the rest of the world," he said. "This is compounded by rigid regulations and excessive bureaucracy associated with impact assessments that are not properly aligned with economic activity, permitting procedures and administrative burdens that make investment more difficult."

Brazil approves shorter workweek ahead of presidential runoff

By Macarena Hermosilla

Brazilian President and candidate for re-election Luiz Inacio Lula da Silva (C) attends a joint meeting with the Workers' Party caucus in Brasilia, Brazil, on October 7. Photo by Andre Borges/EPA

BRASILIA, Brazil, Oct. 15 (UPI) -- Brazil's Senate approved a constitutional amendment to reduce the workweek to five days just 11 days before the presidential runoff election between President Luiz Inácio Lula da Silva and opposition candidate Flávio Bolsonaro.

The reform, initially driven by a social media movement, became the centerpiece of Lula's economic platform in his re-election campaign against Bolsonaro.

After the Chamber of Deputies approved the measure in May, the Senate was expected to vote on it in November. However, lawmakers from Lula's governing coalition pushed through a special legislative schedule, moving the vote forward to secure passage Wednesday night in advance of the runoff.

Bolsonaro initially called the proposal "populist" and warned that it could lead to widespread unemployment. But opposition lawmakers reversed course shortly before the vote as the measure gained broad public support.

National polls showed more than 70% support for the reform, putting pressure on opposition lawmakers ahead of the election.

Right-wing senators ultimately voted almost unanimously in favor of the measure. Bolsonaro justified the decision as a response to demands from working-class voters.

The Senate approved the amendment 75-1.

Brazil's Congress is scheduled to formally enact the amendment Tuesday, replacing the traditional six-day workweek with a five-day schedule and two days off.

The measure will gradually establish a 40-hour weekly limit without reducing workers' pay.

Workers will be entitled to two paid days off each week. According to Brazilian news outlet G1, the days off will not necessarily fall on Saturdays and Sundays. Employers may adjust schedules according to their industry's needs, although at least one day off should preferably fall on Sunday.

The approved amendment also introduces a legal category known as the "superemployee," designed to provide greater scheduling flexibility for highly paid professionals, Folha do S. Paulo reported.

Employees with university degrees earning more than 21,180 Brazilian reais, approximately $3,800 per month, will retain their right to two days off each week, but will no longer be required to record their starting and ending work times.

Analysts say the provision gives employees in senior positions at large companies greater control over their schedules, addressing business concerns about the rigidity of the new rules.

In announcing his change of position, Bolsonaro also sought to address concerns among business leaders who opposed the reform.

According to CNN Brasil, the opposition candidate said that if he wins the Oct. 25 runoff, he will use his congressional majority to amend the legislation in 2027 and compensate businesses through tax exemptions or government subsidies.

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Latin America Rising? Argentina's economy struggling again; Colombia to open mega-prison in December

 

Argentina's poverty rate climbs to nearly one in three under Milei

Americas

Argentina’s poverty rate rose to 32.3% in the first half of 2026 from 28.2% in the previous six months, official data showed on Thursday, as incomes lagged rising prices. Extreme poverty climbed to 7.5% from 6.3%. Among children aged 14 and under, 44.5% were poor.

Argentina's poverty rate increased to 32.3 percent in the first half of 2026, partly erasing gains made under President Javier Milei as incomes fail to keep step with rising prices, official statistics showed Thursday.

The rate grew 4.1 points compared to the last half of 2025, the national statistics agency Indec said.

The rate of extreme poverty also shot up from 6.3 percent to 7.5 percent.

Children were the worst hit, with 44.5 percent of Argentines aged 14 years and younger classified as poor, and 10.8 percent as extremely poor.

Indec considers adults who cannot afford a basic basket of goods and services valued at around $340 to be poor. 

It considers those who cannot afford a more basic food-only basket worth around $150 to be extremely poor.

The figures deal a setback to Milei, a free-market radical, who nearly halved the poverty rate during the first two years of his mandate, mainly by shrinking perennially high inflation.

The poverty rate has swung wildly since he came to power on a promise to revive the moribund economy through drastic austerity measures and deregulation.

READ MOREArgentines protest Milei's austerity, demanding higher wages and public spending

From a high of 52.9 percent in the first half of 2024, following his more-than-50-percent devaluation of the peso, the rate fell to 28.2 percent in the second half of 2025.

This year's increase coincided with a rebound in inflation at the start of the year before a new decline to 1.7 percent in August, the lowest level in 14 months.

Eduardo Donza, a researcher at the Social Debt Observatory of the Argentine Catholic University (UCA), blamed job insecurity for high poverty rates in South America's second-largest economy.

The manufacturing and retail sectors have hemorrhaged jobs due to falling purchasing power and Milei's decision to threw open Argentina to foreign competition, leading to a surge in imports.

Some 30,000 companies have closed since he took office, and unemployment rose to 7.9 percent in the second quarter of this year, the highest level since 2021.

Economists say that, more than unemployment, poverty is being driven by the high rate of informal work.

"The biggest problem is job insecurity, not unemployment, because when families are deprived...they have to invent a job, which can be collecting waste, street vending, selling food at the train station," said Donza. 

Milei claims that he has lifted 14 million people out of poverty -- an estimate based on the fall in poverty from the peak it hit after he became president.

(FRANCE 24 with AFP)

Colombia plans to open megaprison in December

By Mar Puig

Colombia government figures have previously put the national prison system's official capacity at about 82,000 people but the country was holding more than 100,000 prisoners. File Photo by Carlos Ortega

Oct. 1 (UPI) -- Colombia plans to soon move prisoners into a nearly 2,000-inmate megaprison, opening the sprawling complex in stages before construction is completed. It is a major effort by the government to expand maximum-security capacity.

The Renacer penitentiary, situated in a rural area of Sabanas de San Ángel in Colombia's northern Caribbean department of Magdalena, about a 4½-hour drive from the coastal city of Santa Marta, will begin operating progressively in December, Magdalena Gov. Margarita Guerra announced Wednesday after talks with national prison authorities.

The complex is more than 80% complete, according to the Magdalena government, which said work will continue as sections of the prison become operational. Renacer will eventually have space for 1,974 prisoners and encompasses about 646,000 square feet on a 54-acre property, according to Colombia's Prison and Jail Services Unit, known as USPEC. The complex is designed to severely restrict prisoners' contact with the outside world. Colombian media reported, citing USPEC officials, that the facility includes reinforced infrastructure intended to prevent communication between prisoners and technology to block cellphone and Internet signals.

The security features have prompted comparisons in Colombian and international media with the prison policies of Salvadoran President Nayib Bukele, whose government built the Terrorism Confinement Center, known as CECOT, as part of its crackdown on gangs.

President Abelardo De La Espriella has advocated expanding Colombia's use of remote, high-security prisons and has proposed building additional large penitentiaries for some of the country's most dangerous inmates.

Renacer, however, predates De La Espriella's administration.

The project was developed during the government of former President Iván Duque to add prison capacity and alleviate overcrowding in Colombia's Caribbean region. The construction contract was awarded in 2019 and work began the following year, according to USPEC information reported by El Espectador.

The orison originally was expected to be completed within 32 months, but has faced years of delays involving funding, infrastructure requirements, environmental permits, the COVID-19 pandemic and security problems.

The delays have substantially increased its cost. The project initially was valued at about $56 million, but has since climbed to approximately $87 million after three additions to the original contract, according to El Espectador.

National and regional authorities inspected Renacer in late September in an effort to accelerate its completion.

The Magdalena government said that as of July, physical construction was 86% complete while financial execution stood at 75%. More recent estimates from USPEC put physical progress at about 88%.

Officials are also working to improve access to the remote facility. The Magdalena government said studies have begun on upgrades to the road connecting the prison area with Colombia's Ruta del Sol highway.

Renacer comes as Colombia continues to struggle with overcrowding across its prison system -- a rate of 27.1% in March, according to the National Penitentiary and Prison Institute, or INPEC.

Government figures have previously put the national prison system's official capacity at about 82,000 people but the country was holding more than 100,000 prisoners.

The Constitutional Court has for decades identified structural problems in Colombia's prison system, including overcrowding and conditions that have affected inmates' fundamental rights.

Guerra said the government has secured the resources needed to finish Renacer after years of delays.

"After more than six years, the community waited for the completion of the penitentiary center," Guerra said in a social media post following the latest inspection.

The government has not said how many prisoners will be transferred to Renacer during the initial phase or which inmates will be selected for the first transfers.

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