Slowdown in China should affect Brazil: Central Bank head

President of Brazil’s Central Bank Roberto Campos Neto said today (Feb. 21) that the slowdown facing China’s economy should make growth difficult in Brazil and the other Latin American countries. The COVID-19 pandemic, the Chinese real estate crisis, and its aging population are among the main drivers behind the reduced growth in the Asian nation, Neto added.

“I believe the concern is that a lower growth in China may make growth in Latin America and Brazil difficult. I think the main focus should be understanding how this process is likely to happen, and taking the necessary action and reinvent ourselves so it makes as little an impact as possible,” said the leader during an online lecture by Canal AgroMais.

“The Chinese authority itself has said—and we can already notice it—that we are going to see a growth in China closer to the global growth, not so far detached from it, though it’s still above it,” he added.

Inflation

The president of Brazil’s Central Bank once again noted that Brazil’s inflation trend is still on the rise. The hike in prices, he said, is being propelled chiefly by energy. The data mentioned by Neto are for January in comparison with the same month last year.

“Indeed, we see a trend for inflation that’s still going upwards. Inflation in Brazil is indeed one of the world’s largest—10.4 percent—but Brazil saw the globe’s highest energy inflation—5.8 percent. If Brazil’s energy inflation had stood at the average of other countries [approximately two percent], our inflation would also have been like the other nations [around 6.7 percent]. Basically, what brought Brazil’s inflation above the average was energy,” he said.

The data used by Neto compare Brazilian inflation in January 2020 (10.4%) in the last 12 months with figures on inflation in Turkey, 36.1 percent; Russia, 8.4 percent; Chile, 7.9 percent; the United States, 7.5 percent; Colombia, 6.9 percent; Spain, 6.5 percent; Peru, 6.4 percent; South Africa, 5.9 percent; the Netherlands, 5.7 percent; India, 5.6 percent; the Euro area, 5 percent; Germany, 4.9 percent; Italy, 4.8 percent; and France, 2.9 percent.