Bolsonaro missed chances to alleviate inflation with major Middle East ally

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...