The president of the Brazilian Central Bank, Roberto Campos Neto, said Tuesday, Aug. 23, that the fall in energy prices could lead to a fall in inflation from 9% to 5% or 4% per year.
“Energy inflation in Brazil is going down because of the recent government measures,” he added.
“We are already working to bring inflation down from 4% to 2%. We need to be prepared,” he said at the 18th International Investment Seminar sponsored by Moneda Asset Management in Santiago, Chile.
At the event, Campos Neto pointed out that commodity prices are beginning to slow. He also indicated that it is “a given” that the U.S. economy will slow and that this is not being questioned by the market.
“We should be concerned if the slowdown in the U.S. is accompanied by continued high inflation,” he added.
The Monetary Authority president added that in many countries, monetary policy is not yet in the “tightening range” needed to control inflation and that Brazil has begun to raise interest rates faster.
“The markets are saying that most of the work is done in Brazil,” he said. “Financial conditions got tight very quickly. We have to do our work, financial conditions are very volatile.”
Campos Neto said that central banks worldwide had not realized that energy prices had risen even before the Ukraine crisis.
He said this was because, with the pandemic, the consumption of goods increased at the expense of the consumption of services.