The world will put “on the brakes” to control inflation in 2022, says economist

The global economy in 2022 “should cool down”, according to economist and director-general of Ibmec São Paulo and Brasília, Reginaldo Nogueira, in an interview with CNN Rádio.

After the expected growth for 2021, due to the economic recovery amid the improvement of the pandemic, there is a phenomenon that is established, according to the expert.

“There is a negative supply shock that puts pressure on wages and raises prices, and demand growth stimulated by monetary policies made last year to prevent a further collapse,” he explained.

In the case of Brazil, “we had very low interest rates for a long time and we are reaping the fruits of this conjunction, a supply crisis with stimulus to demand.

“All this will be the “great challenge of 2022”: “It will be necessary to control demand, with interest rates, fiscal policies. All countries put the brakes on to control inflation and prevent ‘snowball’ from longer lasting effects.

Reginaldo sees two scenarios related to China and the United States that concern Brazil. “In the US, there is a reversal of monetary policy, from the moment interest rates start to rise to control inflation, the increase has very relevant global effects, attracts capital back, puts pressure on the exchange rate and causes emerging economies , like Brazil, respond with monetary tightening,” he said.

China, for the economist, “begins to want to depend less on the growth of the civil construction and commodities sector and to change the clean energy matrix. This implies a less dependent on commodities, which is the great Brazilian export engine for Chinese.”