The Central Bank of Brazil lowered its economic growth forecast for this year due to the inflation rate, increased public spending, and various weather events.

The reduction in the growth forecast “indicates that further interest rate hikes will affect activity as policymakers struggle with above-target inflation.”

The Brazilian regulator expects gross domestic product to grow 1.9 %, a figure below the previous estimate of 2.1 %, according to its monetary policy report published on Thursday, March 27.

Persistent inflation, as well as consumer demand, are the cornerstone of Latin American central banks’ efforts. On the other hand, “adverse weather conditions and lavish public spending are fueling food price increases, infuriating consumers and making the job of central bank chief Gabriel Galipolo even more difficult.”

Brazilian President Luiz Inácio Lula da Silva remains active in the face of this situation, making decisions to ease the pressure of the high cost of living.

M.Pino

Source: larepublica

(Reference image source: F Cary Snyder on Unsplash)

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