Brexit will hurt Latin America

(Photo: Jasper Juinen - Bloomberg)

Britain’s June 23 vote to leave the European Union (EU) will have economic ripple effects that will hurt Latin America, but its potential political impact could be much more dangerous.

Let’s start with the economic consequences of the Brexit, as Britain’s decision to leave the EU is now universally known.

First, most economists agree that it will cause a further decline of Latin American commodity prices, which have already fallen substantially over the past four years.

The Brexit is expected to bring about a sharp slowdown in European trade, which would slow down world economic growth. That would bring down Latin American commodity prices, because slower world economic growth means that rich countries will buy less oil, minerals, grains and other raw materials that Latin America sells.

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