Brazil & Southern Cone - July 2011 (ISSN 1741-4431)

The government considers the inflation rate its main economic challenge. In the 12 months to June 2011 it was 8.6%, which is well above the official target of an annual rate of between 4% and 6%. On 12 July Fernando Lorenzo, the economy minister, outlined government measures to lower the rate and gave only the vaguest hints about what it might do next, if the official assumption that inflationary pressures in the economy will ease proves false. Lorenzo stressed that the government would not take any risks with its principal economic policy, which is to improve the distribution of wealth and reduce inequality. He claimed that the government had made steady progress on this since 2007, reducing the number of people living in extreme poverty. Lorenzo implied that the government took a broad view of inequality, because he said that spending on security, public health, housing and infrastructure would all increase.

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