Head of the Central Bank of Brazil expects inflation to peak soon and subside in 2022

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Head of the Central Bank of Brazil expects inflation to peak soon and subside in 2022




File photo of the president of the Central Bank of Brazil, Roberto Campos Neto, in a ceremony at the Planalto Palace, in Brasilia


© Reuters/ADRIANO MACHADO
File photo of the president of the Central Bank of Brazil, Roberto Campos Neto, in a ceremony at the Planalto Palace, in Brasilia


By Marcela Ayres

BRASILIA, Nov 26 (Reuters) – Brazil’s central bank president Roberto Campos Neto said on Friday that the body expects inflation to peak shortly and to recede in 2022.

In an event with real estate executives, Campos Neto said that the central bank estimates that inflation will reach its highest level in September, but that it was surprised by the magnitude of the impact on energy prices.

He added that the central bank is ahead of the curve of increases in interest rates, but that the policy on financing costs must consider that Brazil has had serious episodes of uncontrolled inflation.

“The cost of monetary policy not doing its job is higher for society,” he said. Interest rate hikes are likely to affect demand for mortgages and Campos Neto said there will be discussions on the matter at a meeting with CEOs of Brazilian lenders on Friday.

Brazil’s Central Bank will lower its projection for GDP growth in 2022 from the current estimate of 2.1%, but not as much as market analysts predict, Campos Neto added.

The central bank’s latest Focus survey showed estimates of 0.7% GDP growth for next year. Campos Neto said that the entity was concerned about the current situation of COVID in Europe, the new South African variant and its impact on the global economy.

(Report by Marcela Ayres in Brasilia, written by Tatiana Bautzer. Edited in Spanish by Marion Giraldo)

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