Brazil Is Not Afraid of Inflation and Plans to Further Cut Interest Rates
Written by Newsroom
Friday, 03 July 2009
The Brazilian government set its inflation target for 2011 at 4.5%,
seeing no evidence of significant inflationary pressures going forward.
May consumer price inflation or IPCA, was 0.47%, and 5.2% in the last
twelve months and is expected to have slowed down further during June.
The decision to keep the target unaltered from last year underscores the government's "goal of maintaining the credibility and flexibility of its monetary policy," the Finance Ministry said in a statement. The target was unveiled by Planning Minister Paulo Bernardo.
"Inflation globally will accommodate (to lower levels), with no evidence of price peaks in the future." the statement said. "Despite all that, good policymaking practice calls for prudence."
Brazil's Central Bank (BC) uses the IPCA consumer price index as a guide when setting interest rates. The May benchmark index little changed from April, but some economists fear that a recovery of Brazil's economy could trigger a sprint in consumer prices inflation.
Brazil's Central bank has reduced interest rates by 450 basis points since the beginning of the year, cutting in four straight policy meetings to help lift Latinamerica's largest economy out of recession. The so called Selic rate now stands at 9.25% but could drop further at the July 22 meeting of the bank's monetary committee.
According to the Central Bank's weekly survey of 100 analysts and economists from banks and brokerages, released earlier in the week, expectations call for a 2009 IPCA inflation rate of 4.4%. Inflation in 2008 was 5.9%. The survey also showed analysts expecting Selic to end the year at 8.75%.
The economy contracted 0.8% in the first quarter of 2009, after a 3.6% plunge in the fourth quarter of last year. It is expected to contract 0.5% in 2009, compared to over 5% growth in 2008.
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The Brazilian government set its inflation target for 2011 at 4.5%,
seeing no evidence of significant inflationary pressures going forward.
May consumer price inflation or IPCA, was 0.47%, and 5.2% in the last
twelve months and is expected to have slowed down further during June.
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The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.