While the Brazilian Central Bank engages in the world’s most intense monetary tightening policy, the country’s 12-month inflation rate remains in the double digits. Over the last year, transport costs — which affect most economic activity — have risen 19.6 percent. Overall fuel prices have gone up by an eye-watering 45 percent.
Diesel and gasoline prices are above the 40-percent inflation threshold, garnering significant popularity losses for Brazil’s far-right President Jair Bolsonaro, who asked his staff and allies in Congress to draft legislation alleviating the crisis. In October, the lower house passed a bill reducing the rate of state goods and services tax on fuel, but the matter has stalled in the Senate. Meanwhile, opposition senators are pushing for reform to create a price stabilization mechanism funded by an export tax on oil.
But this isn’t an exclusively Brazilian problem. Rising fuel prices are causing headaches for economies around the world, including the...
Search
