Campos Neto praises inflation trajectory, but warns about services and expectations

Brasília (Reuters) – The president of the Central Bank, Roberto Campos Neto, considers that inflation in Brazil is on a downward trend and highlighted better-than-expected March data.

However, in a presentation prepared for a lecture this Friday (26), he considered that inflation in underlying services remains at a high level, proving resilient in items most linked to the labor market.

The BC president also said that long-term inflation expectations in Brazil remain unmoored.

At an event promoted by the Young Presidents’ Organization (YPO), he highlighted that inflation is falling more slowly around the world and that all attention is focused on the United States.

These uncertainties, according to him, arise from the fact that it is not possible to see where disinflation will come from in the USA.

GDP projection

Regarding economic activity, the president of the Central Bank stated that it is very difficult for Brazil’s Gross Domestic Product (GDP) to grow less than 2% in 2024, considering last year’s results and data from the first quarter.

For this prediction not to be confirmed, according to him, “something very different” would need to occur in the second half of this year.

The assessment shows an improvement in relation to the BC’s official forecasts. In its most recent projection, made at the end of March, the monetary authority increased the estimate for activity growth in Brazil from 1.7% to 1.9%.