Inflation in Brazil should only start to be controlled in 2023, says Bradesco president

Bradesco’s president, Octavio de Lazari Júnior, expects that inflation will continue to pressure the global economy, and that of Brazil in particular – which should make the basic interest rate remain high at least until the end of this semester. .

“I believe that inflation will continue to be persistent this whole year, and the expectation is that it will begin to be more controlled as of next year. This will happen globally, and in Brazil in particular,” the executive told journalists during the Forum’s meeting. Economic World in Davos, Switzerland.

He projects that the Selic, currently at 12.75%, will reach 13.5% this year, with 2022 inflation at up to 11%. The index is well above the ceiling of the inflation target set by the government, which is 5%.

The market’s current projection for inflation is still slightly below 8%, according to the Focus bulletin, a compilation by the Central Bank of the country’s main banking houses at the end of April.

Lazari emphasizes, however, that although more serious in Brazil, the problem is global. The day before, a group of eminent economists linked to the Forum signed a report in which they predict the intensification of inflation and fragmentation in globalization, which means more upheavals in global supply chains and, therefore, more pressure on prices.

“The whole world is worried about what is happening with the supply of global supply chains, so this gives rise to a concern or an expectation of inflation continuing for longer. And this should indeed happen”, points out Lazari.

“Until you re-establish all global supply chains, which is what needs to happen effectively, so that you have the best control of inflation. Today, inflation is supply, not demand. From the moment you re-establish the chains of global supplies you have a greater supply and that brings inflation down.”

The executive’s perspective, however, is that this will not happen anytime soon.

“You still have the problem of the pandemic, which has a relevant influence, and the problem of war [na Ucrânia]which also has an important influence because both Ukraine and Russia are important producers of raw materials and exportable products.”

Lazari declined to comment on possible impacts of the change of command at Petrobras — the second in 40 days, with the replacement of José Mauro Coelho by Caio Paes de Andrade, close to Minister Paulo Guedes (Economy), announced on Monday night. For him, the company is seen as “consolidated, regardless of who the president is”.