Rising inflation is a global concern, but the rate registered in Brazil remains well above the average observed in the largest economies in the world. A report released this Wednesday (4) by the Organization for Economic Cooperation and Development (OECD) shows that inflation accumulated in 12 months in Brazil is the highest in the G20 – group of the richest countries –, just behind the Turkey and gives Argentina.
Here, inflation measured by the Broad National Consumer Price Index (IPCA) reached 11.3% in the 12-month period up to March. It’s already been 7 months in a row with annual inflation above double digits.
- Inflation spreads and affects 8 out of 10 items surveyed by the IBGE
- In 5 years, real lost 30% of its purchasing power
In the group of OECD countries, which includes all developed and some emerging economies, 12-month inflation reached 8.8% in March, compared to 7.8% in February – the highest level since October 1988. In the G20 group, the rate was 7.9%, against 6.8% in the previous month. In the G7, it rose to 7.1%, coming from 6.3%.
According to the report, about a fifth of the 38 OECD members had double-digit inflation in March, with the highest in Turkey (61.1%). The only other countries in the organization (but not among the largest economies) with an annual rate above 10% are Lithuania (15.7%), Estonia (15.2%), Czech Republic (12.7%), Latvia (11.5%), Poland (11%) and Slovakia (10.4%).
The OECD highlighted the strong pressure from energy prices, whose inflation jumped 33.7% in 12 months, the highest increase since May 1980. Excluding food and energy, inflation for the group’s countries was 5.9 %.
Will inflation give a truce?
In an attempt to curb inflation, countries have accelerated and intensified the rise in basic interest rates.
In Brazil, the expectation of the financial market, in a survey carried out last week by the BC with more than 100 banks, is that the Selic rate will end 2022 at the level of 13.25% per year.
- Brazil resumes leadership of the world ranking of real interest rates
US central bank raises interest rates for the first time since 2018, and by half a percentage point
The official inflation result for April will be released by the IBGE on the 11th. Pulled by the rise in fuels, the inflation preview recorded the highest rise for the month since 1995with the 12-month rate reaching 12%.
report of g1 showed that inflation, in addition to being higher, is also more widespread, affecting 8 out of 10 items surveyed by the IBGE. The diffusion index jumped to 78.7%, the highest level ever recorded for the months of April and the highest level since February 2003, which indicates that inflation should remain under pressure for the next few months.
The current projection of the financial market is for an inflation of 7.89% in 2022. However, since last year, analysts already predict that the IPCA will close for the 2nd year in a row above the ceiling of the government’s target, which had been set by 3.5% for 2022.
Rising interest rates in the US could trigger more inflation in Brazil