Not only did price rise slow, but there was deflation: In Good Romance, it grew by 0.68% per month last July.
This is the lowest number recorded since the start of the historic series in 1980, as reported this week by the Brazilian State Institute of Statistics (IBGE).
“The result of the month was mainly influenced by the transport sector, which had the sharpest decline (-4.51%), and contributed with the biggest negative impact (-1.00 percentage points) to the index”, said the same body via a Detailed statement.
In this context, the economist Gabriel Zelpo explained to NA: “The decline was mainly due to a reduction in taxes on fuel, which was done temporarily. This included a reduction in taxes on industrial products carried out by Bolsonaro for industrial in Brazil. The deflation observed in objects should be added. That drop is not temporary.
The expert also linked the increase in interest rates “aggressively” encouraged by the Brazilian government, “and that they made a significant financial adjustment.”
This, according to Zelpo, “ultimately cools the economy and people consume less. This causes a slowdown in demand and a downturn in prices in a directly proportional sense.”