Brazil & Southern Cone - July 2026

This July edition of the Latin American Regional Report: Brazil & Southern Cone begins with an analysis of the controversial decision by the US government to label Brazil’s two most powerful criminal groups, the Primeiro Comando da Capital (PCC) and Comando Vermelho (CV), as foreign terrorist organisations (FTOs). The designation put serious strain on relations between the administrations of Brazil’s President Luiz Inácio Lula da Silva and US President Donald Trump, given that the Lula government has framed the designations as a threat to Brazilian sovereignty.

Still focusing on Brazil, the next piece looks at the fiscal stimuli implemented by the Lula government in recent months. With Lula planning to run for another term in the presidential election in October, the former labour leader is pushing a plethora of costly growth measures, with the likely aim of boosting economic activity and consumer confidence to help him win a fourth mandate. We then analyse the environmental goals of the Lula administration, which has seen some success, including the annual decrease in deforestation in recent years. However, as the next article explains, there are still major risks that could undermine these green goals, with a raft of potentially harmful legislation making progress in congress, as well as the continued support from authorities for controversial infrastructure projects that have been criticised by environmental groups.

We then move to Chile, with a look at the fiscal concerns of the government led by President José Antonio Kast. In June Finance Minister Jorge Quiroz stated that the government will not meet its promise of eliminating the structural budget deficit by 2030. In another piece about Chile, we examine a new plan from the Kast administration aimed at preventing crime and combatting criminal organisations, which reflects the government’s efforts to signal that it is taking the issue of security seriously.

Moving on to Uruguay, the following article looks at the efforts of President Yamandú Orsi to help kickstart the economy. Uruguay has long enjoyed a reputation as a beacon of institutional stability in Latin America. But as Orsi himself has found it, stability alone has not been enough for the small South American country to attract investment, and his government has announced a new bill aiming to improve Uruguay’s growth prospects and competitiveness. In the final article of this edition, we consider the agreement made by Argentina’s government to increase pay for university workers. While the increase may have defused some social discontent, it fell far short of the sector’s demands and highlights President Javier Milei’s delicate balancing act between fiscal austerity and political survival.