Good morning! Today, we’re talking about how Brazil’s inflation may have already peaked. How PIX has made its mark on e-commerce. Brazilians’ trust in the Armed Forces. And the guest list to Jair Bolsonaro’s international bashing of the voting system.
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Inflation expectations are tumbling (but just for 2022)
Brazil’s IPCA benchmark consumer price index flagged the first deflation in 26 months, as July figures came at -0.68 percent this morning. The results (the lowest for any month since 1980) are a combination of the Central Bank’s successive moves to raise interests (from 2 to 13.75 percent since March of last year) and the government’s efforts to force energy prices down.
Why it matters. Scorching inflation has dented families’ purchasing power and fueled Brazil’s rising poverty crisis. Now, prices are expected to ease, at least for the next two to four months.
Outlook. For six weeks in a row, markets have lowered their year-end inflation forecast to 7.11 percent. In June, the median prediction was at nearly 9 percent.
Impact. For President...