A High of 0.56% of the National Consumer Price Index (IPCA) shows that the country’s official inflation indicator is disseminated and should continue to be pressured in the short term, according to experts heard by CNN.
This was the largest IPCA for a month of March since 2003 (0.71%). The great vector for the result, according to economists, was the Food price variation.
“When we look at the last 5 years, we have seen that food has risen more than average inflation. The accumulated rate is only distanced from medium inflation, with food occupying a growing space in the family budget, and a slightly more consistent drop will take time. There are no signs that important food prices will start to fall and relieve consumer account,” André Braz, FGV IBRE price coordinator, said in an interview with CNN Money on Friday (11).
Braz explained that expenses related to services and administered prices have had a small retreat, which signals that the central bank’s monetary policy is taking effect, especially about durable goods. Still, the pressure on food does not give in and has no prospect of retreating right now.
“The supermarket account will not yet get cheap. The sources of pressure have now diminished, at least the proteins have come out a little, but fresh foods are gaining greater space by climate effects,” he added.
For Alexandre Espírito Santo, chief economist at Way Investimentos, the figures released on Friday do not contribute to a change in the Central Bank (BC) interest rates.
The economist explained that March is usually a month of lower inflation, and the highest variation in more than 20 years pressures the Monetary Policy Committee (Copom) at the next meeting, even with the uncertainties before the trade war started by Donald Trump.
“Another indicator that came above expected, which shows that the scenario is not favorable, inflation is still at a high level and far from the goal. Even with the challenging external scenario, the point is that the numbers are still bad here, and the Central Bank should not change the monetary policy in force,” he said.
Gustavo Sung, chief economist at Suno Research, said the scenario of continuation of the monetary squeeze is favored by federal government actions to boost the economy.
“In our view, some points can also make it difficult for the monetary authority to work, such as recent government measures to avoid cooling the economy, as they may limit deceleration or even intensify inflation,” he said.
Among the measures cited by the economist are the expansion of payroll loans to private sector workers, the release of FGTS (Time Guarantee Fund), the readjustment of the minimum wage and the possible anticipation of the 13th installment of the INSS (National Institute of Social Security).
Both Espírito Santo and Gustavo Sung maintain IPCA predictions above 5%, more than 2 percentage points above the goal from 3% to 2025.
