Official inflation is expected to remain high and approach 10% in 12 months – News

THE skyrocketing electricity and fuel bill prices should boost the August inflation result, to be released this Thursday morning (9). With the expected high, the IPCA (Broad National Consumer Price Index) should touch 10% in the accumulated period of the last 12 months.

The most recent financial market expectations released by the BC (Central Bank) point to an increase of around 0.7% in prices calculated last month, which would raise inflation for the period between September 2020 and August 2021 to 9 .5%. In July, the rate was 8.98%.

According to weekly forecasts, inflation should still rise at a higher pace this month and start to slow down from October onwards. THE The expectation is current that the IPCA ends the year at 7.58%.

In the collection carried out between July 14th and August 13th, the preview of August inflation was 0.89%, the highest index for the month since 2002, according to the IBGE (Brazilian Institute of Geography and Statistics). In the last 12 months, the IPCA-15 (National Consumer Price Index – 15) accumulates an increase of 9.3%.

This September, households’ pockets will continue to be affected by the variation in electricity bills amidst the worst water crisis in the last 91 years, which resulted in the creation of the water scarcity flag. the new tariff extra sets an additional charge of BRL 14.20 for every 100 kilowatt-hours (kWh) consumed and must maintain energy as the budget villain.

In all cases, the price index already represents more than double the target set by the government for this year’s official inflation of 3.35%, with a tolerance of 1.5 percentage points (from 2.25% to 5 .25%).

Faced with the scenario of uncontrolled prices, the BC (Central Bank) bets on raising the basic interest rate of the economy. Only in the last five meetings, the Copom (Monetary Policy Committee) increased the Selic by 3.25 percentage points, from 2% per year to 5.25% per year.

According to experts, BC’s movements already target the 2022 inflation target, established at 3.5% by the CMN (National Monetary Council), with a tolerance of 1.5 percentage points. “The Central Bank’s unequivocal commitment is with the convergence of inflation to the target in the relevant horizon and the future steps of monetary policy are freely adjusted with this objective”, highlights the penultimate minutes of the Copom.