Brazilian consumer prices will continue to rise

A study published today by International Monetary Fund (IMF) economists Jorge Alvarez and Philip Barrett argues that the war in Ukraine will quicken inflation, which they “now expect to remain elevated for longer than previously forecast on higher commodity costs and broader price pressures.”

Inflation has been a global phenomenon, as the war aggravated already surging commodity prices and demand began to peak last year. In Brazil, though, consumer price rises were already in the double digits by the time Vladimir Putin invaded Ukraine — and 12-month inflation hit a 19-year high in March.

Markets are ratcheting up expectations for inflation — from 6.86 percent a month ago to 7.65 percent now — but consumers also expect prices to keep rising. A recent poll shows that two-thirds of Brazilians believe goods and services will get either more or much more expensive within the next few months.