CNN Brasil: 06/18/2023
Wholesale prices fell 7%, the largest drop in 28 years, and helped to lower interest rates
In the view of economists, a strong deflation in commodity prices is already starting to alleviate consumer prices and opens more room for the Central Bank to cut the Selic interest rate.
After surpassing 40% and reaching record levels in 2021, wholesale inflation, which tracks the prices of raw materials and products sold by the agricultural and industrial sectors, is now falling by more than 7% and registering its lowest levels since at least the beginning of the Real Plan in 1994.
In the view of a broad group of economists, this means that the prices reaching consumers should soon start to reflect at least a portion of these declines.
“Andrea Damico, chief economist of Armor Capital, mentioned that commodities are becoming cheaper in Brazilian reais, which is impacting wholesale prices and, in turn, starting to reach consumers,” citing, for example, the relief in food prices.
“There is still a significant portion of this wholesale deflation that needs to reach the consumer, which is likely to continue aiding the disinflation of industrial goods in the coming months.”
