The anticipated inflation for the eighth month of the year in Brazil, which measures the second half of July and the first half of August, reached 0,89% according to the official stats office IBGE and is the highest since August 2002.
The index identified as the Consumer Prices Index-15 (IPCA-15) is considered an anticipation of the whole month inflation, and experienced a spike over the previous index of 0,72%. Overall inflation in Latin America's largest economy has accumulated an increase of 5,81% so far this year and of 9,30% in the last twelve months.
According to IBGE, of the eight sections of the survey, the biggest jump was Housing, 1,97%, followed by Transport, Food and Beverage with 1,11% and 1,02% respectively. Not to mention air tickets that climbed 35%.
Despite the high rates, above targets, Brazilian Economy minister Paulo Guedes anticipated that because of a raft of lost cases involving government debts, and inflation, it is possible that spending next year will be even higher.
With inflation increasing as it is now, we estimate that the space to expand social programs...will be eliminated. And this means we could start 2022 by surpassing the spending cap...minister Guedes told Folha de Sao Paulo.
Last week before the anticipated inflation index was announced, president Jair Bolsonaro accused the governors for the increase in fuel prices and in some goods from the basic food basket.
This is all the consequence of remaining at home because of the pandemic, it's not my fault, I was openly opposed, insisted the president during his recent visit to the state of Alagoas.
A week ago financial analysts said that inflation forecast in Brazil during 2021, should be closer to 7,11%, far from the central bank's target of 3,75% with a plus/minus margin of 1,5 percentage points, or 5,25%.
However Guedes in an interview with Folha de Sao Paulo, rejected that Brazil had entered a period of prices out of control and insisted that inflation between 7% and 8%, is fine for Brazil
The Brazilian economy last year contracted 4,1%, worst performance since 1996, but this year is estimated to expand 5,30%