Sergio Vale: Government measures to contain inflation are like drying ice

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According to a survey by the Brazilian Institute of Geography and Statistics (IBGE), monthly income per person in 2021 was the lowest in the last 10 years. More than 100 million people – almost half of the Brazilian population – lived on R$ 415.00 per month last year. O CNN Specialist in economy Sergio Vale commented, this Friday (10), the measures of the federal government that try to contain the economic crisis.

According to Vale, the accelerated inflationary process accounts for much of the drop in Brazilians’ real income.

The solution to this problem, Vale said, involves an economic reform to enable the country’s growth and job creation.

However, the CNN Specialist stated that he does not believe that this will happen in the near future. “Projected growth for the economy remains close to zero,” she said.

Vale also explained that the measures proposed by the federal government, such as a reduction in fuel taxes, should bring “very little” relief in the inflationary situation.

According to CNN Specialist to reach an inflation of 6% at the end of the year, it would be necessary to approve all the measures proposed by the government, pass on the tax drop to the final consumer and hope that there is no worsening in the fiscal scenario or in the exchange rate.

“The government is making an effort, but it should not be able to bring inflation down, as it is contracting a very large fiscal risk for the future with these measures. We’re just drying ice,” Vale said.

See more in the video above.

Source: CNN Brasil

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