Soft landing in the short term, but with uncertainty in the longer term
The data released in recent weeks reinforces expectations of a moderate slowdown in economic activity in Brazil and, at the same time, the continuation of the ongoing disinflationary process, albeit with core inflation falling at a much more gradual pace.
This context is not unique to Brazil. In fact, the process has been similar in the vast majority of developed and emerging countries. In Latin America in particular, the appreciation of currencies, the fall in the prices of commodities and industrial goods and the slowdown in activity largely explain this picture. Countries that began monetary tightening earlier are seeing more favorable inflation data and, as a result, central banks have begun to ease monetary policy. This is the case in Brazil.