MercoPress. South Atlantic News Agency

Brazil's inflation for July 2022 best in 42 years

July's inflation is the result of personal fights undertaken by Bolsonaro to cut down taxes and retail prices

Brazil's Institute of Geography and Statistics Tuesday released its monthly price index report for the month of July, which returned negative figures, in line with Central Bank projections that inflation was slowing down.

 (Read also https://en.mercopress.com/2022/08/09/slight-improvement-in-brazil-s-inflation-forecast )

Meanwhile, the administration of President Jair Bolsonaro launched the new phase of the Auxilio Brasil handouts, an assistance program aimed at boosting the economy, less than two months ahead of the elections.

Brazil's inflation showed the best results since 1980.

“We are for the free market, we do not want to charge you anything, we just want to thank you for your work”, said Bolsonaro in São Paulo before an audience of national and foreign agribusiness entrepreneurs.

“I'm not going to quote his name here to avoid someone saying I'm playing politics, but there is another person who wants the regulation of agricultural production,” Bolsonaro commented about former President Luiz Inácio Lula Da Silva, whom he shall be facing in the elections.

The Rio de Janeiro-based Brazilian Institute of Geography and Statistics (IBGE) reported that the Consumer Price Index (Ipca) showed a -0.68% inflation in July.

The inflationary drop was mainly due to the reduction of the fuel tax and the drop in electricity rates, IBGE's Pedro Kislanov explained.

Cutting taxes was the result of Bolsonaro's dealings with lawmakers to come up with a decision that will entail less funding for some government agencies.

The change of authorities in the state-run oil company Petrobras meant a 15.48% drop in the price of gasoline, and of 11.38% for ethanol, according to IBGE.

Bolsonaro and his campaign team are banking on these achievements to narrow the gap with Lula at the Oct. 2 elections and make it to the runoff to be held Oct. 30 if needed.

The latest survey by Datafolha, the most recognized consulting firm in the country, showed Lula with 47% of voting intentions against 29% for Bolsonaro. Other pollsters such as Quaest showed last week Lula with 44% and Bolsonaro with 32% of the votes.

Increasing the Auxilio Brasil program from R$ 400 to R$ 600 reais (US$ 80 to US$ 120) is also expected to even up the score.

A R$ 1,000 (US$ 200) has also been made available for around one million truck drivers. This “package of benefits” will be in effect until December 31, which is why the opposition called it an “electioneering” program

The newspaper Valor Economico published Tuesday that government officials estimated the Auxilio Brasil disbursements marked the beginning of a consistent comeback by Bolsonaro. (Source: ANSA)