Consulting report places Brazil as the 8th country with the highest inflation

Brazil was ranked 8th in the ranking of countries with the highest inflation by the consultancy McKinsen & Company. According to the consultant, the country had an expectation of inflation around 5% for 2022. However, in June, this percentage had already doubled, reaching 10%.

The report published by the consultancy shows how inflation has, at the very least, altered the economic climate and potentially redefined the path of global and national economies around the world in the coming years.

McKinsey experts have examined many of the strategic implications of inflation. And they created a document formulated with the best and latest publicly available data, which offers seven graphs illustrating the insidious progress of inflation.

Over the past six months, inflation has far exceeded expectations for December 2021. In many countries, real rates have doubled their projections.

European countries are particularly affected. For example, inflation in Lithuania is at 15.5% per year, almost five times the expected rate. Poland is at 11% and the UK at 9%, both well above projections. With 3%, Switzerland is an exception.

Asia is seeing a less severe change: Indian inflation is around 7%, just above projections; and South Korea is at 5%. In China and Japan, inflation remains low.

Lithuania, Estonia, Latvia, the Czech Republic, Poland, Slovakia and Hungary are the seven countries with the highest inflation rates compared to Brazil. Other South American countries, such as Chile and Colombia, appear with lower rates. Puerto Rico, in Central America, appears in a better situation in the ranking.

Brazil is the 6th in interest rate increase

In response to the alarming rise in inflation, central banks around the world are raising their interest rates. So far, however, rate increases in most countries have not kept pace with inflation.

In any case, Brazil is the 6th country to register the biggest increase in its interest rates, with 4 percentage points accumulated until June 2022. That month, the Copom (Monetary Policy Committee of the Central Bank) announced an increase of 0 .5 percentage point in the basic interest rate of the economy.

With the decision, the so-called Selic rose from 12.75% to 13.25% per year. It started 2022 at 9.25% per year. It was raised by Copom four times, rising 4 percentage points up to June. In terms of interest rate hikes, Brazil is second only to Argentina (14%), Ghana (6.16%), Hungary (5.35%), Chile (5%) and Poland (4.25 %).

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