The high public spending has pressured the aggregate demand of the economy above supply, generating pressures in prices
The Focus Bulletin, which brings together the median of macroeconomic projections of the main financial institutions, once again brought an increase in projection of. The previous week, the IPCA projection was 5.65%; In this edition it went to 5.68%. More importantly, the number itself is the trend. For several consecutive weeks, the expectation of inflation rises, despite the Selic being in restrictive level.
Market reading is based on the premise that monetary policy alone is not sufficient to control the increase in prices. For many economists and analysts, the government should do its part with adjustments in public accounts, mainly because inflation is linked to expansionary fiscal policy.
The high public spending has pressured the aggregate demand of the economy above supply, generating pressures in prices. In addition, it raises the dollar, with high prices impacts, and worsens inflationary predictions. It seems that this policy should continue to avoid the discouraging of the ongoing economy. This means that inflation will continue to rise and expectations worsening.
*This text does not necessarily reflect the opinion of the young Pan.
