Inflation Casts a Pall over Brazil

Although no specific prediction is ventured, the minutes of the most recent meeting of Brazil’s Copom (Monetary Policy Committee), released today by the Brazilian Central Bank (BC), include the remark that in the present context, with annualized interest rates of 16 percent and the exchange rate at a level of 3.00 reais to the American dollar, inflation forecasts exceed the official targets of 5.5 percent for this year and 4.5 percent for 2005, with tolerance limits of 2 percent in either direction.Even if inflation in 2004 does not exceed the limit of 7.5 percent, this is still very close to the expectations of financial markets, which are predicting a Broad Consumer Price Index (IPCA) of 7.19 percent, due in large part to increases in industrial and administered prices, which contributed decisively to the 0.91 percent hike in the IPCA last month.

The Copom minutes mention that the estimated price readjustments for gasoline and cooking gas over the course of the year remain unchanged at 9.5 percent and 6.8 percent, respectively. Likewise, the estimates of 11.6 percent for residential electric rates and 12.8 percent for fixed point telephone services.

Regarding this month, the minutes state that the Committee expects consumer price indexes to decelerate. Overall, during the period from January to July, administered prices have already risen 4.69 percent, more, therefore, than the 4.42% increase in unregulated prices.

Agência Brasil
Reporter: Stenio Ribeiro
Translator: David Silberstein


  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


You May Also Like

Rio Removes Thousands from Favelas and Promises Them a Home

Thousands of Brazil’s favela (shantytown) residents were evacuated by Brazilian authorities on Sunday so ...

Brazil Teaches Lebanon to Use Waste to Build Houses and Roads

Brazil is going to help Lebanon recycle waste to be used in the construction ...

Goií¡s, Brazil, Grows Its Exports Over 50%

Goiás, a state in the Brazilian Midwest, occupies the 11th position in the Brazilian ...

Record Day in Brazil Brought by Dollar Inflow

Brazilian shares rose to record numbers, today, tracking gains in the U.S. market on a ...

What Brazil Needs Is a Few Percents More in GDP Growth

Many countries in Latin America have recently turned toward leftist populism. But most observers ...

Brazil’s Opposition Party Wants Probe of Alleged Cuba Money for Lula

The Brazilian Social Democratic Party (PSDB) wants Brazil’s Electoral Supreme Court (TSE) to investigate ...

The Art of Stealing

A poll by Berlin-based Transparency International with international businessmen from around the world has ...

Amid Poverty and Decaying Neighborhoods the Drug Business Is Thriving in Brazil

Grajaú Bus Terminal, São Paulo Capital South Region. For years, the government of São ...

How I wrote a (almost) bestseller at 70

I can still remember a time when books were easy to acquire and prices ...

Ever So Slowly Brazilian Women Are Catching Up to Their Male Peers

Neither Giselle, nor destitute homeless. A new portrait of Brazilian women emerges from a ...