Bad news for Brazil: inflation accelerated in November

In the last twelve months the price rise was 6.64%, it was known yesterday.

Despite the fall in demand in Brazil, registered in the third quarter, inflation seems to be under total control. In November, according to data from the Brazilian Institute of Geography and Statistics, the rate remained at 6.64% annualized. The figure exceeds the upper limit set by the government earlier this year.

For specialists, however, the situation should not alarm. It happens that the depression that the Brazilian economy between July and September last promises, in fact, an obstacle to the advance in prices. To this we must add the enormous financial costs prevailing in the country and, simultaneously, the fall in global demand for commodities, whether food or feed industry. All that determine the coming months, a "correction" if you want "natural" the nascent inflation.

Estimates of the Brazilian Ministry of Finance pointed in that direction to price stability from now on. The calculation of the Gross Domestic Product growth is well below that predicted earlier this year. Hopefully this year will end with a productivity growth of 3.2%. This figure is very poor when compared with the 7.5% rise in economic activity occurred in 2010.

According to the Focus newsletter published by the Brazilian Central Bank, which is made based on financial market forecasts, the inflation forecast for next year is declining gradually. He went from 5.56% to 5.49%. In a sense, it is still suggestive that each time the Brazilian government gets ready to cut the Selic interest rate, taken as reference for interest payments on debt, have an impact on the markets for the deviations of inflation in relation to the goals established at the beginning. Remember that last week, the Monetary Policy Committee lowered the rate by half a point of reference, and there are those who presume that these interests will soon be in single digits rather than two as at present (it is 11%) . There is already talk of a rate of 9.75%. The Central Bank considered, as well as private economists that the trend of falling prices due to lower demand. According to the institution by the year end with an inflationary increase of 6%. According to the IBGE (Brazilian INDEC), the main responsible for the increase in prices between October and November were food. These became 1.08% more expensive. Of these goods, meat was the product that suffered the highest elevation adjustments of 2.63%. From this point of view, it is to note that the price increase was comparatively more burdensome for low-income families.

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