Economy

How did Brazil’s inflation rate get so low?

How did Brazil’s inflation rate get so low?
Photo: Marcelo Camargo/ABr

The Brazilian government has announced the IPCA price index, which measures the official inflation rate, for 2017: +2.95 percent. It is the lowest rate since 1998, a year during which prices went up by only 1.65 percent. The 2017 results are so low that, for the first time in history, the inflation was below the official target range of 4.5 percent, plus or minus 1.5 percent.

Central Bank President Ilan Goldfajn rushed to say that Brazil’s latest super harvests were the deciding factor, since they caused deflation in food products. However, we can’t explain an 8 percent drop in inflation between 2015 and 2017 as the result of one single factor.

[infogram id=”65666845-7c57-4c5d-9a71-dfbfd6643a32″ prefix=”sk0″ format=”interactive” title=”Inflation rate (2015-17)”]

To understand the 2017...

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