Good signals from the Brazilian economy: inflation picks up in mid July

Saturday, July 21st 2012 - 07:45 UTC

Full article 5 comments

Consumer prices in Brazil rose faster than expected in the month to mid-July on higher food costs, suggesting the central bank may have less room than previously believed to cut interest rates much further. Read full article

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ChrisR
How can a rise in inflation be a 'good signal' from the economy? :o(

Bizarre headline.
Jul 21st, 2012 - 10:47 am - Link - Report abuse 0
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British_Kirchnerist
Well according to the article the government doesn't want inflation to go below 2.5%, in fact 2% would be worse than 6% according to their official target, so it must serve some role or signal something else that is positive. Rising wages, perhaps?
Jul 21st, 2012 - 04:58 pm - Link - Report abuse 0
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ChrisR
@2 The only thing I can think of that would appeal to the demented Finance Minister is that a rise of 6% (say) would give the illusion of expansion in the economy in excess of his 'guarantee' of 2.5%.

It would of course creat far worse problems.
Jul 21st, 2012 - 06:17 pm - Link - Report abuse 0
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Fido Dido
It's much better than in the States that's in an deflationary situation and stagnant/declining salaries and high/extreem high indebtnes consumers who's home's value are sinking.
Jul 21st, 2012 - 06:54 pm - Link - Report abuse 0
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JoseAngeldeMonterrey
Controlled inflation is a good sign of a healthy economy moving forward, specially in the light of stagnant growth, as it has been the case with Brazil´s last three quarters. I am right, Brazil´s economists are worried about stagnation.
Stagnant growth and low inflation can eventually lead a country to deflation, when people stops buying things expecting to see prices coming down, unemployment rises and the economy stalls. Japan´s bubble economy expanded during the 80s but suddenly collapsed into deflation and stagnation, in what people calls the Lost Decade. I don´t see that scenario for Brazil.
Jul 21st, 2012 - 07:09 pm - Link - Report abuse 0
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