Published this Friday (24), the Extended Consumer Price Index-15 (IPCA-15 ) of June indicated a slowdown in the process inflationary Brazilian economy, but still slowly, according to senior economist at LCA Consultores, Fábio Romão.
In an interview with CNN he stated that the discharge process of fees performed by central bank is usually a “bad medicine” for the current type of inflation in Brazil, linked to a “classic supply shock”.
“That’s why we are seeing this inflation still high. Despite the June IPCA-15 coming slightly above expectations, we had a smaller dispersion, below 70%, and a lower average in the cores”, he observes.
For Romão, the Brazilian inflationary scenario is still “ugly”, but the rise in interest rates “apparently begins to have some effect. Even so, the war in Ukraine delayed this with effects on production chains, putting pressure on inflation”.
The economist also points out that the IPCA-15, considered the preview of official inflation, has not yet taken into account the effects of the last fuel price readjustment due to the final date of data collection. Therefore, the impact on inflation should only be noticed in the full index, which reflects the entire month.
The current situation, he says, occurs because “the pandemic promoted a mismatch of global production chains in 2020, and when things looked like they were going to rearrange themselves, war came, so there is a lot of imported inflation, which occurs all over the world”.
“Internally, the uncertain political scenario devalues the exchange rate and puts pressure on inflation, and there is a culture of price readjustment as a way of protecting trainers, which feeds back inflation”, he evaluates.
Source: CNN Brasil
