Explaining Brazil #184: Brazil’s risk of imported inflation

A Russian invasion of Ukraine or prolonged geopolitical tensions could disrupt Brazil's agricultural production and push inflation further up

The White House said it has developed “specific sanctions packages” to strike at Russian elites who are “in or near the inner circle of the Kremlin,” should President Vladimir Putin order an invasion of Ukraine. While these moves would potentially cripple the Russian economy, they would also cause ripple effects across the globe, with more inflation, market crashes, and heightened energy risks.

And while analysts don’t think a Russian invasion of Ukraine is the base scenario at the moment, prolonged tensions will nevertheless have a big impact on markets. 

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  • Mario Braga is a Senior Political Risk Analyst at Control Risks in Brazil. He was an Erasmus Mundus Journalism scholar pursuing his Master’s degree at Aarhus University (Denmark) and at London’s City University.

This episode used music from Uppbeat. License codes: BZRVMD6OGP8Y12EG, LEZZKCYZLQXTPE6N, QZFA55XPVMO4TARL.

Background reading:

  • Listen to Episode #183: Between Moscow and Washington, in which reporters André Spigariol and Lucas Berti discuss how Russia is trying to increase its influence over Latin America — and how Brazilian diplomacy is navigating the crisis.
  • In a meeting with Brazilian Foreign Minister Carlos França, U.S. Secretary of State Antony Blinken said the U.S. wants Brazil to step up and put pressure on Russia against taking military action in Ukraine. André Spigariol shares the details of these talks.
  • When Latin American countries received their first vaccines, they didn’t get them from Western powers — but from China and Russia instead. But these deals often came with strings attached, as we explained in our Explaining Brazil Episode #150.
  • Russia is quietly making moves to enlarge its influence in Latin America, writes Lucas Berti. Growing investment has been matched more recently by vaccine diplomacy, while the U.S.’s attention has been drawn elsewhere.
  • Under pressure from China and agribusiness interests in Congress – and growing global concern over President Bolsonaro’s own behavior – Brazil has made a foreign policy about-face.
  • Inflation is already at a five-year peak in Brazil.

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