News of the Week Brazil – The impact of the truckers' strike on prices is expected to dissipate this month



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The effect of the truckers' strike on inflation is expected to begin to dissipate at the end of the month, with the reversal of rising prices for gasoline and gas cooking, for example, according to experts. In June, inflation, as measured by the National Consumer Price Index (IPCA), rose 1.26%, the highest rate for the month since 1995, or 2.26%. %. The result exceeded the forecasts of financial institutions consulted by the Central Bank (BC), which forecast a change of 1.15%. In May, the effect of shortages caused by the truckers strike at the end of the month was added to the pressures on energy and fuel prices. As a result, the IPCA increased by 0.40%. In June, the acceleration occurred due to the intensification of the effects of the stop on the prices of food and petroleum products and the change in tariff rates.

Márcio Salvato, coordinator of the economics course of the Brazilian Institute of Capital Markets (Ibmec), explained that the "explosion" of inflation in May and June has occurred due to the increased demand for products like gasoline and cooking gas. "There was too much demand because people wanted to store products such as gasoline and cooking gas increased, and this had the effect of changing the structure of transportation costs." [19659002ForSalvatoinflationmayevenbelowerthanforecastwithgasolineandgaspricesreturningtonormal"Thereshouldbelowerpricesforproductsthathavehadadirecteffect"hesaidHepointedoutthatthereisnoriskwhatsoeverhelosescontrolofinflationbecauseoftheeffectsofthetruckersstrike

+ Do you want to buy a property? According to the inflation report released in June by British Columbia, this month, despite the lagged effects of the rising dollar observed since the end of April and the expected increase in air fares in July, lower inflation rates are expected. This is expected to occur due to the reversal of the effects of the shortage caused by the truckers' strike, the favorable seasonality of food prices and the large idleness of the economy.

The recovery of activity at a more gradual pace than expected

For this month, the forecast of financial institutions consulted by the BCB is that the IPCA should be at 0.35%, and fall to 0.12 % August 1965

"We hope that by July this effect will begin to dilute.We had this pressure now in June, but in July it should decrease," said economist Marcio Milan of Tendência Consultoria.

Because it is considered a climax, the economist recalls that the risk of non-compliance with the inflation target is zero. The target is 4.5%, with a margin of tolerance of 1.5 percentage points up or down. "Even with other events such as exchange fees and administrative fees, the risk is zero, the projections continue below the center." Our projection is that the IPCA will be at 3.7% this year. year, "said Milan. With information from Agência Brasil.

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