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LUCAS VETTORAZZO
RIO DE JANEIRO, RJ (FOLHAPRESS) – Brazilian inflation has closed at 3.75% in 2018, announced the IBGE Friday. 19659003] The indicator was below the target of 4.5% per annum set by the National Monetary Council (NMC), due to the slow recovery of economic activity in the country, from the last drop in fuel prices and food prices compared to two years earlier. In December, the IPCA, the official index of inflation in the country, stood at 0.15% against a deflation (net decrease in prices) of 0.21% in March. This index was below the center of the goal for the second year in a row
Despite the improvement in the unemployment rate in 2018, the worker's income did not increase significantly and the new labor force did not increase significantly in December.
This is the smallest change for the month of December since the introduction of the Real Plan in Brazil in 1994.
The level of investment has not returned to its level before the crisis, despite improving the confidence of business leaders and the unused capacity of the sector.
This evolution is linked to a recovery that has not materialized. as forecast in 2018, these factors contributed to the maintenance of low levels of price increases.
The lowest inflation observed in December was mainly due to the deflation of transport prices (-0.54%), (0.15%), with a reduction in electrical energy.
In December, the average price of electricity fell by 1.96% after a drop of 4.04%. in November.
Fuels dropped 4.25%, after November, when prices were 2.42% cheaper
Gasoline nonetheless closed up 7.24% in January. accumulated in 12 months. Fuels account for 5% of the IPCA. Meanwhile, food prices, the nasty inflationists of 2015 and 2016, returned to normal in 2018 after a record crop in 2017.
The indicator closed in December at 0.44%, slightly higher than November (0.39%).
Despite this increase, the level is the lowest since 2009, if we did not take into account the negative variation of 2017 when the deflation was 1.87%.
Since the beginning of the year, the variation has been 4.04%. The items that eased inflation in December were the same as those weighing on the cumulative indicator.
The items that eased inflation in December are the same as those that weighed in the accumulated index Housing (4.72%), Transportation (4.19%) and Food and beverages (4.04%) experienced increases that pushed the IPCA up, but were not enough to get the center index of the
"We can say that inflation has ended 2018 under control, "said Fernando Gonçalves, head of the IBGE National Price Index System
Controlled inflation has been at l. origin of the Selic rate reduction movement, the basic interest rate, which currently stands at 6.5% per annum.
The interest of arbitration is one of the means that the Central Bank must take to control inflation, whether or not encouraging the consumption of the population and the investments of the companies .
Lower interest rates can serve as incentives for the consumption of goods such as real estate, automobiles and household appliances [19659003] Civil construction, for example, the only one The economy sector, which has not yet contracted more uniformly, is capital-intensive and sensitive to lower interest rates.
Conversely, higher rates can serve as inhibitors of consumption.
The lowest inflation observed in December was mainly due to the deflation of transport prices (-0.54%), a reduction in gasoline prices and a slowdown in the housing group (0, 15%).
In December, the average price of electricity fell by 1.96% after a 4.04% drop in November.
Fuels dropped by 4.25%. on the right s a November where prices were 2.42% cheaper
Gasoline nonetheless closed the year up 7.24% in 12 months. Fuels account for 5% of the IPCA. Meanwhile, food prices, the nasty inflationists of 2015 and 2016, have returned to normal in 2018 after a record crop in 2017.
The indicator closed December with a rise of 0.44%, up slightly from November (0.39%). Controlled inflation has led to a reduction in the Selic rate, the base rate, which is now 6.5% higher than the previous year.
Interest rates are one of the means by which the Central Bank must take action to control inflation, whether or not it encourages the consumption of the population and business investment
.
Civil construction, for example, the only sector of the economy that has not yet contracted more evenly, is capital-intensive and sensitive to declining labor market rates. ;interest.
At the other end. , higher interest rates can be used as inhibitors of consumption in times of uncontrolled prices
NEXT MONTHS
By 2019, badysts expect a 12-month inflation between 4% and 5% per year, increasing as verified in a While the projections of the latest Focus newsletter are 4.01%, some badysts already estimate this indicator to be a higher percentage point.
The consensus is that the improvement in the economy could accompany an increase.
Everton Carneiro, an badyst at RC Consultores, explains that after two years of bad margins, entrepreneurs may want to offset recent losses by readjustments when economic activity shows signs of lasting improvement .
In addition, he explains, there can be occasional highs of food and fuel.
"Although food prices are more sensitive to climate problems, it is difficult to predict them long in advance.
" Although inflation is gradually increasing, the price of food is rising. indicator will not go beyond the one-hour goal for the other, which could pave the way for further reductions in interest, "he said.
The Bolsonaro government should take up the challenge of arbitrating its interests in times of inflation and growth of economic activity, said Carneiro., the central bank will have to make an accurate calculation to decide on whether it will be able to do so. whether or not to raise interest rates when inflation rises again in the country.
It states however that interest rates should remain at 6.5% almost
Analysts heard by the Focus Bulletin are expecting an interest rate of 8% by the end of this year.
"It is complicated to estimate inflation with 12 months in advance, that is how to play búzios This can be confirmed or not and the variables are numerous. I think that the government of Bolsonaro, in this specific aspect, will work between the cross and the sword, having to tolerate higher inflation without manipulating interests in order not to compromise the recovery, "
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