The Impacts of the War and the Pandemic on the Brazilian Economy

Economists agree that the increase in interest rates is the best measure to control inflation, boosted by the war, the pandemic and Brazilian internal politics. However, the result has not been as expected.

The recent lockdown in China could lead to a supply shortage of machinery parts and raw materials for industries worldwide, including in Brazil. This scenario, combined with internal political issues and crisis between political powers, also affects the cost of living expenses.

The outcome is the increase in inflation to 12%, accumulated over the last 12 months. In an attempt to stop this growth of the inflation rate, the Brazilian Central Bank has raised the basic interest rate to 12,75%. The Russian invasion in Ukraine, and the economic sanctions imposed by the world’s main economies to Russia have set the alarm for yet another world crisis.

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Contributing Advisors