Weekly Report - 09 April 2015 (WR-15-14)

By historical standards, perhaps, Brazil’s current rate of inflation, an annualised rate of 8.13%, is not outlandishly high. But in terms of recent memory, it is worrying; not since December 2003 has it been higher. For March alone, inflation rose 1.32% compared with 0.92% for the same period of last year. The central bank’s target is, in theory, 4.5% with a band of “tolerance” of plus or minus 2%. The rising cost of living might be more politically palatable if it were accompanied by a commensurate rise in economic growth. But it is not: in 2014, the Brazilian economy grew by just 0.1% and according to the latest central bank survey of 100 economists, it is likely to shrink by 1.01% in 2015.