As Brazil does not stop innovating in terms of economic oddities, now it is going through an absolutely unusual phenomenon that is classified by technicians as “shadow inflation”. It would be a different format of famine, in which some companies do not increase product prices, but cut services and the quality of what they deliver. In other words: they adopt some cost-cutting measures that can give their customers and consumers a less satisfying experience. Take the case, for example, of hotels, which maintain the cost of the fare, but provide sporadic cleaning service — not every day, as usual — and restaurants, with fewer waiters, making service worse. In practice, this type of “shadow inflation” is already starting to be noticed in several areas. Even from the industry. In the automotive sector, the variety of colors in the available models has diminished. And so on. The country is regressing in the pattern of what is offered, as a way to avoid pure and simple price markdowns, a measure capable of scaring away consumers. Throughout this year of 2021, it is a fact, inflation continues to increase in any type of measurement in which it is evaluated. The resuming of the markdowns occurs with force and in an accelerated way. Many companies face the added drama of a disruption in the supply of raw materials. The supply chain, everyone knows, has been compromised. The shortage of labor is another sad reality of the process, given the need to cut the composition of the final expenditure. Changes in the quality standard are rarely considered in the final variation of the inflation rate, but they do occur and are in effect here. It’s a smart way to circumvent the price correction to avoid losing the consumer. Now, to contain the famine, the ball is with the Central Bank. Only the monetary authority to prevent the reckless flight of inflation indicators. Bank technicians point out that they are ready to bring the rate back to the plumb and target in 2022. This means bringing it to a level of around 4.5%. At the moment, it has already broken the double-digit level in annual terms. By doing “whatever is necessary”, as defined by the BC’s Corporate Risk Management area, understand the consistent increase in interest rates. It’s the available weapon. In fact, the majority of the board that manages the Bank thinks that the Selic markdowns are already long overdue. Technicians believe that it should be at a level well above the current level and that it needs to rise urgently. In the internal assessment, today’s inflationary pressure is especially concentrated in items such as electricity and food. Both were moved, in general, by increases of a temporary nature. At least that’s what the BC considers. One way or another, the financial market revised, for the 12th consecutive week, the estimate for the IPCA in 2022. And the projections are all above the target. With the global trend of cascading markdowns and the exchange rate becoming more and more unfavorable to the real, the challenge of putting inflation back on track is growing day by day. It’s hoping for everything to work out.
Carlos José Marques, editorial director