“In 2022 we will have substantially lower inflation”, says former BC director

In an interview with CNN, this Friday (10), the former director of the Central Bank José Júlio Senna commented on the IPCA (Extended Consumer Price Index) of November and compared it with inflation in other countries. For the former BC director, inflation could decrease “substantially” next year.

The IPCA – the index that measures the country’s official inflation – was 0.95% in November, compared to 1.25% in the previous month. Despite having shown deceleration, the value is the highest for the month since 2015, as released by the Brazilian Institute of Geography and Statistics (IBGE) this Friday (10).

“This inflationary process that we are in is rare, it is a process that came with the pandemic, there is no way for us to model it, there is no way to be inspired to project how far this inflation will go. But, I imagine that in 2022 we will have inflation substantially lower than that of 2021, it will be difficult to meet the target exactly, but it will be lower, very likely”, stated Senna.

Asked about the tightening of monetary policy, the former director of the Central Bank stated that the process has been carried out gradually.

“The BC started to withdraw the so-called monetary accommodation, that is, it started to make an upward adjustment in March. And I would say that the real interest rate in Brazil is already quite high, the monetary policy interest, which is commanded by the BC and supposedly will be in force for a period of one year. When you take the inflation projection from that number, you find the real interest rate. Now and it’s more than 5.3%, it’s a lot of interest”, he comments.

AT CNN, José Júlio Senna said that other countries are experiencing the same inflation problem as Brazil, and highlighted the impacts caused by the pandemic on this effect.

“The inflation that is there is an international phenomenon and has its origins in the pandemic. The pandemic harmed the production of the most varied sectors, made it difficult to produce goods for the world, and families stopped purchasing services, especially durable goods. It’s a rare phenomenon and that’s why we have difficulty understanding how far it goes,” he said.