’12-month inflation has peaked in Brazil and is starting to improve,’ says central bank president

Brazilian Central Bank (BC) President Roberto Campos Neto said that 12-month inflation has peaked in Brazil and is improving. However, this process should still be taken with caution, he said.

For Campos Neto, the idling of the labor market is one of the most important points for analysis at the next meeting of the Monetary Policy Committee (Copom).

The statements were made during the Valor 1000 event, organized by the Valor Econômico newspaper in São Paulo.

“We have been trying to understand, in the services sector, what the pressure of wages on inflation could be. We feel that inactivity in the labor market is decreasing. The inactivity in the labor market is one of the most important points for the next Copom. It is necessary to understand the impact of the decline in employment inactivity on long-term inflation,” he explained.

“We are in a process of upward revisions. We will see an upward revision in Brazilian GDP for 2022. The employment part is the big highlight and a surprise. We are targeting a rate close to 8.5%. That was a surprise. The employed population was a big highlight,” he said.

According to Campos Neto, fiscal data show a better-than-expected public finance situation, although he knows that financing social programs will be a major challenge next year.

“The macroeconomic environment for this year is favorable. GDP and employment are up, the fiscal situation has improved and inflation is down,” he said.

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