Central Bank Revises Inflation Estimates for 2022; understand

Inflation has been a concern for Brazilians throughout 2021 and everything indicates that in the coming year, there will still be problems. The central bank, BC, re-adjusted forecast Inflation for 2022. The rate increased from 3.5% to 3.7%.

The British Columbia Center’s new assessment worries the federal government and the Department of the Economy. After all, the 2022 target was 3.5%. In 2021, the roof will explode, fueled by rising fuel and food prices.

New inflation forecasts for 2022

The forecast given by the central bank for inflation in 2022 occurred after the increase in the base interest rate, Cilic. In this case, it rose by a percentage point, reaching 6.25%. Selic is usually high just to try contain inflation.

anticipation B.C. Present in the minutes of the meeting of the Monetary Policy Committee (Copom). In addition to the inflation forecast for 2022, there is already an estimate for 2023 (3.2%).

“According to the baseline scenario, which uses an interest rate path extracted from the Focus survey, the PPP exchange rate and stable dollar commodity prices in real terms, inflation expectations are slightly above the target for 2022 and around the target for 2023,” the document informs.

Central Bank and Copom believe in improving GDP

The central bank and Copom believe that the second-half GDP result will outperform the first. Part of this is due to vaccination, which has allowed many companies to resume their activities.

“The Committee maintained its vision of a strong resumption of activity in the second half of the year, as the effects of vaccination are felt in a more comprehensive manner,” says Coboom’s meeting minutes.

Now, concern with 2022. It is expected that there will be a slowdown in the economy. Some advisory firms, such as XP, estimate growth at 1.3% for the next year.