The confrontation between Iran and Israel, which began on February 28, 2024, is already exerting significant influence on the global economic scenario. Last week, the price of a barrel of Brent oil reached 105.32 dollars, an increase of 43.8% compared to the value recorded on February 27 of the same year.
In Brazil, the Monetary Policy Committee (Copom) reduced the Selic rate from 15% to 14.75% per year on March 17 and 18, 2024. The decrease of 0.25 percentage points was below the initial expectation of 0.50 points, reflecting the impact of the international scenario on monetary policy.
Additionally, the Central Bank raised its official inflation projection to 3.9% in the Monetary Policy Report released in March. At the same time, the Focus report revealed that the median forecast for inflation in 2024 reached 4.17%, surpassing the Central Bank’s indication.
Brazilian financial analysts also revised upwards the expectation for the Selic rate at the end of the year, which increased from 12.25% to 12.50% per year. Some economists believe the rate could reach 13% if the Middle East crisis continues.
By March 2024, there was a fuel price gap in Brazil compared to the international market: 61% for diesel and 43% for gasoline, according to data from the Brazilian Association of Fuel Importers (Abicom). To contain the rise, the federal government eliminated the PIS-Cofins tax on diesel, aiming to reduce domestic prices.
On the other hand, Petrobras has absorbed part of the international increase in gasoline costs, preventing this adjustment from being fully passed on to the final consumer. Even so, global price pressures affect fuel costs in the country and impact inflation.
On the international level, the United States Federal Reserve (Fed) halted plans for interest rate cuts at the beginning of 2024, citing uncertainties generated by the global conflict. Meanwhile, the Reserve Bank of Australia raised the base interest rate by 0.25 percentage points in March, to a range between 3.85% and 4.10% per year.
The Australian decision was marked by internal divergence: five members voted in favor of the increase, while four were against it. These movements reflect tension over inflationary pressures, especially related to rising energy costs.
The closure of the Strait of Hormuz, an important route for oil flow, is pointed out as a factor increasing pressure on global energy prices. In Brazil, this situation reverberates on fuels and also on food prices, intensifying inflationary challenges.
Experts in Brazil predict that the Selic rate may oscillate between 13% and 13.50% per year if the conflict persists. In this context, Copom signals greater caution, indicating that the pace of Selic rate cuts may slow down and possibly stabilize in upcoming meetings.
Overall, economists emphasize that the passing through of international price increases to Brazilian fuels should push the Broad Consumer Price Index (IPCA) beyond the target of 4%. Thus, the geopolitical conflict keeps central banks around the world attentive to adjusting their monetary policies and interest rates.
The conclusion of the process still depends on how the international scenario will evolve and the decisions of central banks in the coming weeks, who will assess the impacts of the conflict on the balance of inflation and the conduct of economic policy.
