Largest Swiss Bank praises Brazil’s monetary policy and forecasts further decline in inflation
After having one of the highest inflation rates in the world in recent months, Brazil will reverse the scenario of rising prices sooner than other countries.
This assessment was presented in a report by UBS, the largest Swiss bank and most significant private bank in the world.
According to the article “From Ugly Duckling to Swan,” Brazil will tend to return to the bottom of the global ranking in the coming months.
“A reasonable part of the acceleration in services inflation will be directly related to a rebound effect after the initial pandemic phase,” the report says.
In the 14-country analysis, the bank reiterates that Brazil had the 11th highest inflation between March 2021 and January 2022.
“Inflation was faster and more volatile in Brazil than in the other 13 economies in the second half of 2021, and we now expect Brazilian inflation to be lower than the others,” the document says.
“In addition to the tax cuts on gasoline and electricity, the adjustment in commodity prices and the easing of supply constraints should lead to an overall slowdown in headline inflation,” the report says.
The forecast is for the IPCA (National Wide Consumer Price Index) to be 6.5% at the end of 2022. For 2023, the bank’s expectation was left at 4%.
If the forecast is confirmed, the official index at the end of December will be only 1.5 percentage points above the target set by the government for the year.
In August alone, the fall in fuel prices (-10.82%) led to deflation of 0.36%.
The second consecutive decline in the index represents the smallest change for the month since 1998 (-0.51%).
This brings the cumulative IPCA for the 12-month period that ended in August to double digits after one year, reaching a high of 8.73%, according to the Brazilian Institute of Geography and Statistics (IBGE).
Live Market IntelligenceBrazil — Live Market Board
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Brazil — Live Market Board
+1.55%
174,576.80
+1.55%
65,522.56
-0.38%
11,450.75
-0.76%
3,009,029
+0.46%
2,508.47
-0.09%
60,117.56
+0.55%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 174,576.80 | +1.55% | +21.85% | 171,906.72 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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