May 17, 2022

News Collective

Complete New Zealand News World

Brazilian singer Anita poses in front of her wax statue at the New York Museum

Gasoline makes Brazil accumulate the highest inflation rate since 2003 in twelve months

This content was published on Dec 10, 2021 – 14:50

Rio de Janeiro, December 10 (EFE). Inflation in Brazil reached 0.95% in November and has accumulated 10.74% in the past 12 months, the highest year-on-year rate since November 2003, again driven by an increase in the price of gasoline which jumped 50.7% last year.

As a result, the South American giant has already reached 9.26% inflation this year, according to the report released Friday by the Brazilian Institute of Geography and Statistics (Ibge).

The price increase in November was 0.30 percentage points higher than the October index (1.25%) and practically stable with the rate recorded in the same month of 2020 (0.89%).

With inflation in November, the annual accumulation remained in the double digits for the third consecutive month, already more than double the maximum expected by the issuer.

The Central Bank of Latin America’s leading economy has set an inflation target of 3.75% for this year, with a tolerance margin of 1.5 percentage points.

All nine groups of products and services registered increases in November in Brazil and the biggest impact on the price hike was felt in transportation, which reached 3.35% driven by the price of fuel and especially gasoline, which rose by 7.38% last month.

The transportation sector had the largest variance and strongest impact for the entire analyzed group this month (0.72 percentage points), but the housing (1.03%) and personal expenses sector (0.57%) also contributed to the rise.

Inflation in November was just below the 1.1% average market expectation, which estimated a price increase of between 0.86% and 1.23%.

See also  Instagram: testing paid subscriptions and exclusive content - people - culture

Analysts estimate a price increase of 10.18% in 2021, and if confirmed, Brazil will close with the highest inflation since 2015 (10.67%).

In an effort to control the strong increase in inflation in recent months, the central bank raised interest rates, which are at 9.25% annually, the highest level since 2017, after seven consecutive increases this year.

According to the source, the price hike will continue in 2022, and by February the rate is expected to reach 10.75% annually, the highest rate since May 2017.

Inflation will also lag in 2022

Inflation forecasts in Brazil next year are not optimistic for the market, which for the first time believes that it will exceed the target set for 2022, with a forecast of 5.02%.

If the economists’ calculations are fulfilled, the following year will be the second year in a row that the South American powerhouse will throw inflation off target.

The source set a 3.5% inflation target for 2022, with a 1.5 percentage point margin.

According to the latest edition of Focus, an issuer’s bulletin that collects market opinions on a weekly basis, in just four weeks, estimates of inflation for the next year have risen from 4.63% to 5.02%.

The bank’s commitment to making more money, loans, and consequently more costly consumption, to stem rising prices is a double-edged sword for a country going through a “technological recession” after two consecutive quarters of negative growth and with persistently high unemployment. levels.

The gross domestic product of Latin America’s largest economy fell 0.1% in the third quarter compared to the second quarter after contracting by 0.4% in the previous three months. EFE

See also  Asian stocks rise, US futures flat; The market assesses the rise in oil prices

mat / og / seva

© EFE 2021. Redistribution and redistribution of all or part of the contents of the EFE Services, without the prior and express consent of EFE SA, is expressly prohibited.