Today’s, which brings together the median of the projections of the country’s main financial institutions, brought concerns. Again, the inflation projection for 2025 and 2026 freaked out. THE Designed for 2025 it is 5.58%, while for 2026 it was 4.30%. In addition to increasing the expectation of inflation, the lower growth projected for this and next year. In the weekly passage, the 2025 GDP variation fell from 2.06% to 2.03%, and to 2026 from 1.72% to 1.70%.
Projections do not yet indicate a scenario of stagflation, but worries expectations of inflation increased, and those of growth decrease. However, if this movement continues, the scenario of strong deceleration of the economy with inflation is not discarded. On the inflationary side, the reason stems from the strong spending of the government, which pressures inflation. In addition, tax worsening can further raise the dollar, bringing additional price pressures.
Another factor that can contribute to the discharge of the North American currency, with inflationary impacts in Brazil, is Trump’s protectionist trade policy. Already the economic slowdown would occur due to the increase of interest. It seems that the government will step on the public spending accelerator to avoid a slowdown in the economy.
However, it is possible that the discharge of this effect on course. In addition, the rise in public spending can increase the market interest rate due to the reduction of national savings and the increase in the risk prize, leading to the drop in investment.
In other words, on the one hand, increased public expense can exert high GDP pressure; But, on the other hand, it generates an increase in interest, which could lead to a fall in the investment in proportionally greater government spending, reduced economic growth. For now there is no stagflation, but the scenario is not that unlikely.
