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On Monday (27/06), Central Bank President Roberto Campos Neto stated that the “worst moment” of inflation in Brazil has passed. Campos Neto made the statement when speaking at the X Lisbon Legal Forum. Data from the Brazilian Institute of Geography and Statistics (IBGE) show that inflation increased between May and June this year and has accumulated an increase of 12,04% in the last 12 months. According to the minutes of the last meeting of the Monetary Policy Committee (Copom), the Central Bank forecasts inflation at 8,8% this year, therefore, above the target ceiling.
Worse Scenario in 2023
Economists say that measures by the Federal Government and the National Congress to zero federal taxes and duties on fuel by the end of this year may even contain inflation in 2022 but should pressure prices in 2023. In March, for example, Congress passed – and Bolsonaro signed into law – the law that until the end of this year brought federal taxes on diesel and cooking gas to zero. In addition, the law limiting ICMS, a state tax, on various items, including fuel, was also enacted. The text eliminates this year federal taxes on gasoline, alcohol and Natural Vehicular Gas (CNV). In all cases, taxes rise again in 2023.
