UPDATE 1-Brazil’s inflation is “completely under control,” said Sachsida of the economy ministry | Instant News


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BRASILIA, Oct 28 (Reuters) – Inflation in Brazil is not an issue and the recent spike caused by rising food and fuel prices was temporary, said Adolfo Sachsida, secretary of economic policy at the economy ministry, Wednesday.

Speaking at an online event organized by Safra Bank, Sachsida also said social distancing could return to pre-pandemic levels in mid-December, which would help reduce unemployment and extend the already underway economic recovery.

“I’m not worried about inflation. When you look at the expectations for this year and next year, inflation is really under control, ”said Sachsida. “Inflation is not a problem.”

The most recent measure of consumer inflation in the month to mid-October was 0.94%, the highest for each October since 1995. Annual inflation rose to 3.52%, still below the central bank’s official goals for this year and next, but some economists said it was. bear attention.

The central bank is expected to keep Selic’s benchmark interest rate at a record low of 2.00% on Wednesday, with some economists expecting to close the door for further easing due to the recent spike in inflation.

Sachsida said the biggest challenges for Brazil’s economy next year will be employment, credit and fiscal consolidation, adding that austerity is the best thing for Brazil, especially the poor, as it will keep inflation and interest rates low.

He said unemployment would fall next year as social distancing restrictions ease and the dominant service sector gains momentum.

“The figures we have suggest that social distancing will return to February levels by mid-December. We are not epidemiologists, I just share data that I follow as part of my job, ”said Sachsida.

“From an economic point of view, they give us great confidence that in mid-December we will experience a movement like we did in February, and from January people will be back safely to work,” he said.

Brazil’s unemployment rate stands at 13.8%, the highest since statistical agency IBGE started the series in 2011, and is expected to increase further in the coming months. (Reported by Jamie McGeever and Marcela Ayres Editing by Chris Reese and Alistair Bell)

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