In the last 12 months, inflation was 4.39%, close to the target ceiling of 4.5%
O Broad Consumer Price Index (IPCA) increased by 0.67% in Aprill, with emphasis on increases in food, medicine, household items and fuel.
It is noteworthy that these were not one-off increases, but widespread ones, confirming the inflationary nature of the current situation. Proof of this is that the diffusion index, which measures the percentage of items with positive variation, was 65%. This means that 65% of the items that make up the IPCA showed a positive variation.
In the last 12 months, inflation was 4.39%, close to the target ceiling of 4.5%. If the Central Bank’s Focus report, which aggregates the median of market expectations, is correct, the IPCA should close the year at 4.9%.
A worsening inflation projections, combined with the lack of prospects for an end to the Middle East conflict and the federal government’s ultra-expansionist fiscal policy – which is expected to inject more than R$120 billion into the economy in 2026 – presents a worrying scenario for maintaining the population’s purchasing power this year.
On the one hand, the government does everything to bring more economic growth in an election year. On the other hand, inflation, including caused by the government’s own economic policy, runs rampant, and could be a central point in the eventual defeat of President Lula. It remains to be seen which effect will prevail.
*This text does not necessarily reflect the opinion of Jovem Pan.
