On March 6, 2023, Gabriel Galípolo, president of the Central Bank of Brazil, highlighted changes in social behavior in the face of inflation, emphasizing the Selic rate, which was at 14.75% per year. He stressed that the Monetary Policy Committee (Copom) would review the Selic on April 29, 2023, reinforcing the importance of careful analysis given the current economic scenario.
Galípolo stated that the Brazilian population no longer tolerates high levels of inflation, unlike previous periods when the annual rate could have reached around 8%. However, he mentioned that despite the reduction in social tolerance, Brazil still faces significant inflationary pressures, especially due to rising prices of oil and diesel, which directly impact the domestic economy.
The president of the Central Bank also linked internal challenges to external factors, citing international conflicts involving the United States, Israel, and Iran. These events influence the global scenario and affect price expectations in Brazil, requiring constant monitoring of global conditions to adjust monetary policy.
Moreover, Galípolo recommended caution in conducting monetary policy, advocating a slow and steady approach to ensure stability. He highlighted that conservative decisions adopted previously helped to contain inflation shocks, making it possible to control market pressures without causing abrupt imbalances.
During the seminar held at the Getulio Vargas Foundation in Rio de Janeiro, the president pointed out a positive change in the social environment, as lower acceptance of inflation facilitates the Central Bank’s task in combating price increases. He explained that although annual inflation may be low, relative prices can remain high, which requires attention to maintain economic balance.
Finally, Galípolo reinforced that the international context is an important determinant in the formulation of inflation expectations in Brazil. Thus, monetary policy needs to adjust to these factors to ensure price stability for consumers, while the Monetary Policy Committee prepares for the next Selic evaluation, scheduled for April 2023.
