Lower inflation: Brazil had the best ranking since 1995 – IMF

Data from the International Monetary Fund (IMF) show that Brazilian inflation in 2022 ranked 144th among 191 countries.

Since 1995, the indicator has never been so low.

Until last year, the best performance had been in 2007, when inflation was the 127th highest among 192 countries.

The survey was conducted by “Valor”.

Last year’s inflation, measured by the Brazilian Institute of Geography and Statistics (IBGE), was 5.79%, well above the center of the Central Bank’s target, 3.5%, with a ceiling of 5%.

In the previous year, inflation had been 10.1%, the 28th highest globally.

A series of measures, mainly applied to fuels, were responsible for this deceleration in prices:

• Exemption of federal taxes, such as PIS/Cofins, on fuels;
• Declaring goods and services such as fuel, energy, telecommunications, and public transportation as essentials. This resulted in the reduction of ICMS rates, the main state tax, which used to reach 34%, as in the case of RJ, to a range between 17% and 18%;
• Revision in the way ICMS is charged.

Part of these measures was reverted by the government of Luiz Inácio Lula da Silva (PT), which has been showing more sympathy towards the financial situation of the states.

Gasoline is likely to have new tax increases.

The report released by the Fund points out that global inflation remains persistent, even with the reversal of food and energy prices.

“But core inflation, which excludes energy and food, which are more volatile, has not yet peaked in many countries,” the institution reports.

It is a question that is being alerted by the Central Bank (BC), which considers that inflation has been falling, but points out that core inflation, which excludes more volatile items, is very resilient.

With information from Gazeta do Povo