Dec 9, 2011

Brazil: Inflation in November.2011

The inflation rate (IPCA) in Brazil reached 0.52% in November, and acumulatted 6.64% over 12 months, with a reduction compared with the previous month, which was 6.97%, as shown in the chart below.

Source: IBGE
Opinion: The Brazilian economy is experiencing a paradox: the labor market is strong, with unemployment at historically low levels, but without growth in retail sales and industry. The current slump in activity level has not been enough to reduce inflation, and history shows that inflation in Brazil has a strong component of price indexation, which has not been considered by policymakers. The controll of inflation is still a big challenge for monetary authorities.

No comments:

Post a Comment