Inflation soars in the world; see country ranking

The soaring of inflation does not only haunt the pockets of consumers in Brazil. During the pandemic, escalating prices took shape in different countries.

What stands out in the Brazilian case is the fact that inflationary pressure has reached the double-digit range in the 12-month period.

Until October, the country’s official inflation, measured by the IPCA (Broad National Consumer Price Index), rose 10.67% in the accumulated result. It is the biggest increase in 12 months since the period ended in January 2016 (10.71%).

Among the nations that make up the G20, only Argentina, with inflation at around 50%, and Turkey, with almost 20%, registered higher advances, indicate data from the Bloomberg agency, gathered by the chief economist of Necton Investimentos, André Perfeito.

In the United States, the world’s largest economy, the rate in 12 months reached 6.2%. It is the biggest since November 1990.

By misaligning global production chains, the pandemic caused a shortage of inputs on the international market. With the lack of raw materials and the reopening of the economy, prices became more expensive in different regions.

In Brazil, this cost pressure has been intensified by the devaluation of the real against the dollar, explains Perfeito. Throughout the pandemic, the US currency gained strength in the country in a context of political turmoil and fiscal uncertainty.

Stronger inflation, says Perfeito, plays against the growth of the Brazilian economy. Necton, for example, projects a small increase of 0.3% in GDP for next year, but there are already financial institutions predicting a recession. In other words, falling GDP in 2022.

“We are seeing a process of inflation and a rise in interest rates. All this translates into a weaker economy,” says Perfeito.