Inflation looks set to get better, says Campos Neto – 05/30/2023 – Market

The scenario for economic activity in Brazil is clearing up a little and the outlook for inflation has improved in recent weeks, although there is still resilience next year, said the president of the Central Bank, Roberto Campos, on Monday night (29). Grandchild.

In Fortaleza (CE), where he participated in the Innovation for Economic Development Award, Campos Neto defended the BC’s monetary policy and commented on expectations for prices and economic activity in the country.

“In terms of inflation expectations, we started to see, in the last few weeks, the numbers improving a little. From 2023 it improved a lot at the end and 2024 we still have some resilience, but we see an improvement.”

“When we get economic activity in Brazil, we also have good news. I always say that the scenario is clearing up a little, because we have an inflation that seems to be gearing towards an improvement, even if slowly, and at the same time that activity has surprised upwards.”

He also said that this is the first time in a historical series that there has been an outbreak of world inflation, while in Brazil inflation is lower than the average. “Contrary to what we hear, this time we have a world inflation outbreak where inflation in Brazil is lower than the rest of the world,” he said.

“I think this was due in part because the Central Bank understood that it needed to raise interest rates, it rose quickly and rose earlier,” he said. “Because in monetary policy, when you do it quickly and do it sooner, the cost to society is lower.”

Last Thursday (25), the president of the BC praised the approval of the fiscal framework in the Chamber and stated that the new fiscal regime eliminates the risk of uncontrolled prices in the country.

“In the expectation part, the framework has great power to influence the expectation of future inflation. Because there was a fear that inflation could simply get out of control. And what the framework makes very clear is that this fear no longer exists” , he said in an interview with GloboNews.

In the Focus Bulletin released this Monday, investors and analysts again reduced expectations for inflation this year and began to see an increase of 5.71% in the IPCA (official index) this year, compared to 5.8% in the previous week.

For 2024, the projection for rising prices remained at 4.13%, and for the next two years, it remains at 4.0%.