Urgent: July Sees Biggest Drop in Inflation Since 1998 After Decrease in Fuel and Electricity Prices

Written by Daiane Souza

Published on 09/08/2022 at 09:36

Updated on 09/08/2022 at 10:33

Fonte da imagem: Pixabay

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On Tuesday, August 09, the IBGE, Brazilian Institute of Geography and Statistics, released data on July inflation, which ended the month negative at 0.68%. In summary, this data represents the largest deflation in history, surpassing the figures from 1998, even before the government of Luiz Inácio Lula da Silva, who managed the country for more than a decade and a half.

The drop in inflation this month occurred after the Bolsonaro government adopted policies to freeze ICMS taxes from states, which would allow for lower prices for diesel, ethanol, and gasoline. Despite this, in the state of Santa Catarina (SC), the price of diesel still flirts with R $8 and gasoline is being sold, in the Itajaí Valley, where the cities of Brusque and Blumenau are located, at a range of R$ 5.4. With that in mind, ethanol is priced at around R$ 5.20. The deflation data from July, that is, the drop in inflation, surpasses that of the Workers’ Party (PT), which was responsible for managing the country for more than a decade and a half.

Another factor that influenced the drop in July inflation, having one of the best indices since 1998, was the decrease in electricity prices, which moved from the scarcity level to the green flag. As of July 13, the National Electric Energy Agency (ANEEL) also approved the correction of tax flags, which would update penalty rates on residential energy expenses.

Inflation Falling: ICMS Freeze Causes Gasoline, Ethanol, and Diesel to Drop Significantly, Coinciding with Election Time

The presidential elections are scheduled to take place in October, and with this in mind, the prices charged for gasoline, diesel, and ethanol have fallen after the Bolsonaro government stated that it could not intervene in the prices of the state-owned Petrobras.

ARTICLE CONTINUES BELOW

Despite The Drop In Inflation, Accumulated Figures Are Still In Double Digits And Raise Economy Concerns

The accumulated inflation for the past twelve months is at 10.07%, according to the IBGE this Tuesday, August 09. One way found by the Central Bank of Brazil to control inflation rates was the increase in the Selic rate, which makes investments in Treasury Direct become more profitable and the government receives more investments from both Brazilians and foreigners, encouraging investors to save money rather than letting it circulate.

Dollar Falls With The Release Of IPCA And Inflation Data

With BC’s expectations that inflation will end the year 2022 at 7% and with the deflation data released today, the dollar is showing a sharp decline, being quoted at around R$ 5.11 after ending the session at around R$ 5.17. Since the end of last year, the US currency had been flirting with R$ 6, which directly impacted fuel prices because Petrobras charges in dollars.

Urgent: July Sees Biggest Drop in Inflation Since 1998 After Decrease in Fuel and Electricity Prices

Inflation Falling: ICMS Freeze Causes Gasoline, Ethanol, and Diesel to Drop Significantly, Coinciding with Election Time

Despite The Drop In Inflation, Accumulated Figures Are Still In Double Digits And Raise Economy Concerns

Dollar Falls With The Release Of IPCA And Inflation Data

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Urgent: July Sees Biggest Drop in Inflation Since 1998 After Decrease in Fuel and Electricity Prices

Inflation Falling: ICMS Freeze Causes Gasoline, Ethanol, and Diesel to Drop Significantly, Coinciding with Election Time

Despite The Drop In Inflation, Accumulated Figures Are Still In Double Digits And Raise Economy Concerns

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A British company has installed in the middle of the ocean the world’s first floating platform that generates electricity 24 hours a day from the temperature difference between the surface and the depths of the Atlantic, without relying on wind or sun.

China is building an artificial island in the middle of the sea, covering 20 km², to construct the largest offshore airport in the world, the Dalian Jinzhouwan. This $4.3 billion project is anchored on more than 3,000 pillars embedded in the rock beneath the ocean and is scheduled to open in 2035.

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