Barking up the wrong tree

BRAZIL ECONOMICS - Report 10 Feb 2025 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

The government's recent efforts to reduce food and beverage prices suggest that it believes inflation exceeding the upper limit of the target range and its acceleration are consequences of higher food prices.

However, as we discuss below, a significant portion of the deterioration results from price increases in components sensitive to both the output gap and exchange rate pass-through, which, in turn, reflect macroeconomic fundamentals, requiring a more contractionary monetary policy along with a more austere fiscal policy. Thus, policies aimed at moderating the impact of food prices address symptoms rather than the causes of the inflationary process.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2025 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.