Brazil Records Record Low Inflation
Brazil reported its annual inflation rate had reduced to a record low of just 3.16% this week, opening the door for the central bank to reduce its interest rates.
The new rate is a further 0.8% down from May and 9% lower than the 12.13% peak of 2022. President Lula da Silva, elected in January, has been clamouring for lower interest rates and has reportedly been furious with the bankers who decided to maintain the six-year high interest rate of 13.75% in June.
Lula da Silva, who is in his third presidential term, has pledged to deliver growth and prosperity. After the latest rate was reported, which is below the bank’s 3.25% target for this year, Lula said “Inflation is falling and soon the interest rate will start to drop because the president of the central bank is stubborn but has no further explanation”.
Inflation is reducing across much of Latin America, where central bankers have aggressively moved to contain prices following the pandemic. However, Brazil is the only major economic country in the region that has seen consumer prices rising by less than its annual target.