Brazil’s current level of inflation is relatively within the normality for the Real Plan, said Finance Minister Fernando Haddad. At a conference of the International Monetary Fund (IMF) in Saudi Arabia, the minister assessed that Brazil left behind the period when inflation was around two digits.
“Brazil has been doing a job, trying to find a path of balance and sustainability, even in the phase of an important adjustment. Brazil left a two -digit inflation three years ago. Today we have an inflation of around 4% to 5%, which is a relatively normal inflation for Brazil since the Real Plan 26 years ago, ”said the minister in the panel” a way to the resilience of emerging markets. “
Despite being one digit, inflation burst the ceiling of the goal in 2024 and should do the same this year, according to the financial market. According to the Focus Bulletin, weekly Central Bank (BC) survey with financial institutions, the official inflation by the National Consumer Price Index (IPCA) should end 2025 At 5.6%, more than one percentage point above the target ceiling of 4.5%.
Last year, the IPCA was 4.83%, also above the 4.5%ceiling. Based on the legislation, the BC sent a letter in which justified the burst of the goal Based on the high dollar, climate problems and heating the economy.
By the continuous inflation target system, every six months, the BC will have to send a letter If inflation in 12 months exceeds the goal of 3%, with a tolerance margin of 1.5 point up or down.
At the IMF meeting, which takes place in the Saudi city of Al-ula, Haddad reaffirmed the justifications of the BC letter. The minister attributed the inflationary peak to the high of the dollar across the planet in the second half of last year, a period marked by the US presidential elections.
“Around 12 to 30 years, inflation remained below 5%, which happens right now. With the strengthening of the dollar around the world, we ended up having an inflationary peak in the second half of last year; Therefore, the Central Bank had to intervene [com altas de juros] To ensure inflation was controlled, ”Haddad justified.
Exchange
With the appreciation of the real in recent weeks, the minister said, prices should stabilize. “The increase in rates will be in the short term. The dollar has returned to a proper level and fell 10% in the last 60 days. I think this will make inflation stabilize, ”he said.
Currently at 13.25% per year, the Selic rate is expected to rise to 14.25% at the March of the Central Bank Monetary Policy Committee, as informed the institution itself at the beginning of the month.
G20
Haddad highlighted the tax reform on consumption, regulated at the end of last year and should generate economic growth in the coming years. According to the minister, Brazil works to have balance and sustainability, even in the midst of an important fiscal adjustment and with strong external uncertainties.
The minister recalled the presidency of Brazil in the G20 (group of the 19 largest economies on the planet, the plus European Union and African Union). According to Haddad, Brazil has left a search legacy for sustainable revilization, capable of reconciling market interests, fighting inequalities and transition to clean energy sources.
Debate mediator, IMF Director-Managing Kristalina Georgieva, defended the ability for economies to adapt to global shocks, which have increased in recent years with incidents such as Covid-19 pandemic and the intensification of climate change. According to her, emerging economies should be guided by “resilience”, anticipating and absorbing part of the effects of geopolitics and external seizures.
