In a recent report, the Central Bank announced that Brazil’s economic activity experienced a contraction of 0.06 % in September compared to the previous month, reaching its lowest point since January. The monthly index of economic activity, used to anticipate the trend of the Gross Domestic Product (GDP), indicated a growth of 1.1 % compared to the same month last year, according to seasonally adjusted data.

When analyzing the quarters, the largest Latin American economy recorded a decrease of 0.64 % between July and September compared to the previous three months.

Although the Central Bank increased its growth forecast for this year from 2 % to 2.9 % in September, attributing this adjustment to the solid performance of the agricultural sector, it warned that economic activity will weaken in the coming quarters. The projection now points to 1.8 % growth by 2024.

Although the federal government remains more optimistic, expecting economic growth above 3 % this year, especially after surprising growth in the second quarter, the long-term outlook suggests economic challenges on the horizon.

K. Tovar

Source: Bancaynegocios

(Referential image source: Raphael Nogueira, Unsplash)

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The National Consumer Price Index of Brazil registered an advance of 0.54 % in January, the greatest variation for this month since 2016 and more than double the data registered at the same month of 2021, as published by the Brazilian Institute of Geography and Statistics (IBGE).

With the new data, the inflation of the largest economy in Latin America continues to expand and is situated at a year-on-year level of 10.38 %, greater than 10.06 % observed in the 12 months immediately preceding. However, the monthly annulment of January is 0.2 points lower than that registered in December 2021.

At its last monetary policy meeting, the Monetary Policy Committee of the Central Bank of Brazil warned that inflation could be maintained above the target range of 3.5 % during this year with a point and a means of upward tolerance and to the Low and reach a level of 5.4 %.

In this scenario, the Central Bank assumes a trajectory of interest rates that would reach up to 12 % in the first half of 2022, it would end the year at 11.75 % and would be reduced by 8 % by 2023.

The new rise in prices during January is explained because eight of the new groups of goods and services analyzed presented price increases. In inter-monthly terms, the greater variation occurred in household item (1.82 %), which accelerated compared to December (1.37 %). This group followed food and beverages (1.11 %), which in turn had the highest incidence in the index during the month, with 0.23 points; Costume (1.07 %) and Communication (1.05 %).

Source: dpa

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