After a hiatus of over a month caused by a strike, the Brazilian Central Bank published its Focus Report, a weekly survey with top-rated investment firms on the direction of the economy. The median forecast for year-end inflation jumped from 6.97 percent four weeks ago to 7.89 percent.
For 2023, markets also raised their forecast, from 4 to 4.1 percent.
Consumer prices have risen at a rapid pace since the start of the pandemic. The 12-month index reached 12.13 percent in April, the highest since November 2003. May’s inflation figures will be released on Thursday. Investors expect a 0.6-percent rise in prices, which would take the 12-month rate to 11.88 percent.
Recent hikes in prices of diesel and aviation fuel should make cargo transportation and air travel less affordable.
As we showed in today’s edition of the Brazil Weekly newsletter, high inflation means interest rates will continue at double-digit levels for many months to come, according to signals recently sent by the Central Bank’s chairman, Roberto Campos Neto.
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