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Economists project that inflation in Brazil will exceed 6% by the end of 2023, marking the third consecutive year that the country has exceeded the target set by the National Monetary Council (CMN).
O National Broad Consumer Price Index (IPCA), which is considered the official inflation of the country, presented a downturn in april compared to March, but the expectation is that inflation will rise again in the second half of the year.
One of the main factors for this forecast is the comparison base for the accumulated in 12 months, because last year, the months of July, August and September presented deflation due to the exemptions of essential items throughout the electoral race. As a result, tax cuts on items important to inflation will start to be excluded from the count, resulting in an increase in the 12-month inflation rate.
The price of gasoline is one of the main contributors to the increase in inflation, based on the administered price group.
It is also expected that there will be increases in the prices of items such as medicines, food away from home, clothing and even lotteries. O increase in inflation it can be harmful for the economy, as it brings uncertainty about when it will be possible to lower the country's basic interest rate, the Selic. The higher the prices, the greater the chances that the Monetary Policy Committee (Copom) will keep the basic rate at high levels in its next meetings.
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The combination of factors, such as the standardization of the Tax on the Circulation of Goods and Services (ICMS) on June 1, the appreciation of the real against the dollar, and the price policy practiced by Petrobras, directly influenced the increase in the price of gasoline. Experts project that gasoline prices could rise by more than 10% in some cities in the country, impacting official inflation by 0,05 percentage points for every 1% increase.
This increase in the price of gasoline is what has the greatest influence on official inflation, compromising almost 5% of the family budget.
The rise in gasoline price is one of the reasons why service sector inflation, which represents 30% of the family budget, is more than double the inflation target set by the CMN for 2023. services associated with the resumption of activities, such as food away from home, should continue to reflect on dammed prices.
A inflation affects the economy in many ways, and the core mission of the Central Bank of Brazil is to combat it. The Selic is currently at 13,75% per annum, and its increase is seen as a way to control inflation. Meanwhile, President Lula is pressuring the Central Bank to reduce the basic interest rate, which is criticized for increasing the cost of credit and discouraging investment.
High inflation can also be detrimental to the family budget, affecting items such as medication, food away from home, clothing and lotteries, compromising a significant portion of the family budget.
Unfortunately, it is likely that the inflation remains a concern to Brazilian economy by the end of 2023. According to expert analyses, inflation is likely to exceed 6%, maintaining an upward trend that has lasted for three consecutive years. This is in part due to a number of factors, including rising fuel and food prices, as well as economic instability caused by the COVID-19 pandemic.
This situation may have consequences for the Brazilian population, as inflation tends to directly impact consumers' purchasing power. With rising prices, many people may find it difficult to pay day-to-day expenses and maintain an adequate standard of living.
It is important to remember that inflation is a complex subject, which depends on several internal and external factors. For this reason, the analysis of the specialists may not materialize exactly as predicted. In any case, it is always essential to keep up to date with market trends and seek ways to balance the household budget.
