The government is consecrating a feat that is difficult to overcome and a kind of achievement that is the opposite of that established by the mythological president Juscelino Kubitschek, who promised to take the country to grow 50 years in five. Jair Bolsonaro, on the contrary, is managing to make Brazil regress 30 years in three, by bringing back the specter of double-digit inflation, snatching the worst IPCA performance in almost three decades in March. Something similar happened only in 1994, even before the Real Plan, which led to price stabilization. Now, the record of this sweeping and not commendable Bolsonarista feat. Awakening the famine with the fury and speed as it was done is, in large part, a portrait of the inefficiency with which the State dealt with the economic challenges that arose ahead. Since 2021, a persistent inflationary scenario has taken hold and weighed especially on food. But not only. From electricity to fuels, almost nothing was left out, radiating the effects to airfare rates and transport in general, such as Uber. The prices, of course, went crazy on the shelves and shelves of supermarkets, with discrepant values even in families of similar products. Oil, for example, became more expensive than olive oil and disorder prevailed in the production chain. It was not an isolated phenomenon. It contaminated the most diverse classes of consumption. Inflation, which essentially affected the poorest sections of the population, is this time eroding the purchasing power of the middle class and imposing revisions of plans on the higher part of the population, which postpones plans such as travel. It is a systemic dismantling in the forces of supply and consumption, bringing a frightening worsening of projections. Inflation will not let up. Analysts are unanimous in pointing out that it still has the ballast to grow and incentives in that sense. There is, on the other hand, a surprising governmental paralysis in the actions to contain the tsunami. The Central Bank itself ended up saying it was “surprised” by the galloping advance of the indices. The wave of interest rate markdowns does not seem to have had the expected effect, even though the monetary authority insists that it is the only way forward. Many are already talking about interest rates in the house of 13.5% soon. Such high levels of interest and inflation generally trigger the protective mechanism of cascading readjustments, where each sector tries to protect itself by pushing costs and the problem forward. A fearsome inertial spiral with well-known consequences. In this vein, for inflation to go from a base of 10% per year to 50% per month is a leap. You can’t play with risk. What will happen from now on is still unknown. The electoral climate does not cooperate. Instead. It encourages populist actions that end up putting even more pressure on rates. The inflationary dragon is likely to burn consumers’ pockets this year, with loss of income and purchasing power. Monetary policy has a big test ahead. Even with the exchange rate cooling, there is no truce in prices. The legacy for the next government will be very bitter.
Carlos Jose Marques, editorial director
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