INPC and IPCA: Brazil has the 3rd highest inflation in the Americas – 05/11/2022 – Market

Consumer inflation in Brazil remained in April among the three highest in the Americas, behind only Venezuela and Argentina, countries that were already experiencing a situation of uncontrolled inflation before the pressures generated by the pandemic and the War in Ukraine.

The consumer price index reached 12.1% accumulated in 12 months in April, according to IPCA data released this Wednesday (11) by the IBGE (Brazilian Institute of Geography and Statistics).

In Venezuela, the local index accumulates a high of 222% in the same period. In Argentina, 55% accumulated until March (there are still no data for last month).

Paraguay, Jamaica and Chile complete the list of countries in the region with rates above double digits. The USA, which registered inflation of 8.3% in the accumulated until April, occupies the 10th position, according to a survey carried out on the Tradingeconomics platform.

Although widespread in virtually all countries, high inflation arrived earlier in Brazil and has been more resistant here, which has been an additional concern for President Jair Bolsonaro’s (PL) reelection plans.

This Wednesday, after the resignation of Bento Albuquerque from the Ministry of Mines and Energy, the president said that “Brazil was one of the countries that least increased the price of things”.

Among the G20 economies, Brazil recently lost third place among those with the highest inflation to Russia, which suffers from war-related sanctions. Within this group, the country is now in fourth position, also behind Turkey and Argentina.

The average G20 inflation for data released in April is 6.6%, excluding Turkey. With an inflation of 70% in 12 months, the country pulls the average to almost 11% when placed in the sample.

Developed countries have suffered more because of fuel prices and other items related to energy supply. The emerging ones suffer additionally from the food issue.

Central banks react to rising prices by raising interest rates

Several central banks have reacted to inflation and raised interest rates — and Brazil is no exception. Currently, the country has the highest interest rate per year (6.69%), discounting the inflation projection, according to the real interest ranking compiled by the MoneYou portal and the manager Infinity Asset Management.

The list has 40 countries. On average, the real interest rate is still negative across these countries.

The worsening of the external economic scenario, which pushed the dollar up again, frustrated expectations that inflation would begin to decline in May and led the Central Bank to signal new interest rate hikes this year.

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