Inflation: definition of the center of the continuous target arises from the loss of purchasing value

The decision by the National Monetary Council to set the center of the continuous inflation target at 3% is a consequence of the loss of purchasing value on the part of the consumer. The assessment is made by economist and coordinator of the Unialfa Master’s Research Center Aurélio Troncoso, who argues that the country has been suffering from the inflationary process.

“We are losing purchasing power due to the devaluation of our currency and the inflationary process is starting to pick up pace. And for this reason, the Central Bank decided to change, the government decided to change the model for assessing the inflation target.” he points out.

The National Monetary Council (CMN) set the center of the continuous target at 3%, with a tolerance margin of 1.5 percentage points above or below. In the view of economist Luigi Mauri, this change brings greater predictability to the economic scenario.

“This continuity of the target will come into effect from 2025 to 3%. Today the target is already fixed at 3%, but instead of reviewing this target every year as is currently the case, this target becomes continuous. If there is any interest on the part of the Ministry of Finance, for example, in changing this target, this announcement of change has to happen much earlier, it will have to happen much earlier, 36 months earlier, precisely to maintain predictability.”

Given this scenario, one of the areas that can cause interference in product prices in Brazil is imports, according to an analysis by the member of the Brazilian Association of Economists for Democracy-RJ, Adhemar Mineiro. In his opinion, this scenario can be seen in light of the movement observed in the US dollar.

“What could happen is the impact of the price of imported products, given that the dollar is rising very quickly, this could have an impact on imported products, we will have to see that, we will have to monitor it, this is a possibility, now it can not come to fruition. There has been a lot of speculative movement around the dollar, so just as it went up it could go down, that is what we will have to monitor in the next period.” consider.

With the implementation of the continuous target, the CMN will no longer need to set an inflation target annually. Only if you wish to change the target, the National Monetary Council will meet and publish the new inflation limits, which will only come into force after 36 months (three years).

By Brasil 61