Brazil is experiencing difficult inflation, but IPCA-15 indicates improvement, says economist

With the Extended National Consumer Price Index on December 15 at 0.78%, inflation ends 2021 at a high of 10.42% in Brazil.

The result is the highest accumulated in the last six years. In November, the IPCA-15 was 1.17%.

In an interview with CNN Radio, professor at Ibmec-SP Renato Veloni noted that the indices for the last two months came in slightly below market projections, which indicates “a very incipient beginning, but it’s a little light at the end of the tunnel appearing”.

Veloni explained that double-digit inflation in 2021 is the result of a series of factors, but highlighted the bad economic policy management of the Jair Bolsonaro government and the effects of this conduct on the rise of the dollar.

The economics professor still considers that the Central Bank took a long time to resort to measures to control the rise in prices.

“The BC did last year what it should have done, injecting a lot of liquidity into the economy”, analyzes Veloni. “But the Central Bank only started raising interest rates in March this year, and by less than one percentage point at each Copom meeting.

In my opinion, that was timid.” Veloni recalled that the scenario for next year should be better, but still with an annual inflation projected at 5%. The center of the Monetary Policy Committee’s target for 2022 is 3.5 %.

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