May, 19th – 2023


1. Inflation rate hits 0.61% in April

The Extended National Consumer Price Index (IPCA), considered to be the official inflation rate for Brazil, registered a 0.61% increase in April, according to data shared by the Brazilian Institute of Geography and Statistics (IBGE). Despite all sectors of the economy registering price increases, the health and hygiene sector saw the most significant increase at 1.49%. This represented 0.19 percentage points of the IPCA growth for the month.

The April results are better than the inflation rate registered in March – with an increase of 0.71% – and February – at 0.84%. In April 2022, the IPCA increased by 1.06%.

G1: IPCA sobe 0,61% em abril, puxado por medicamentos e acima das expectativas de mercado
Folha de S. Paulo: Inflação desacelera a 0,61%, mas fica acima das previsões em abril
Infomoney: IPCA desacelera novamente em abril, para 0,61%, e inflação fica em 4,18% em 12 meses, acima do esperado

2. Chamber of Deputies considers new fiscal anchor an urgent matter

The Chamber of Deputies voted to approve that the fiscal anchor bill must be discussed as an urgent matter. With 367 votes for and 102 against, the Chamber decided the bill has priority over other bills in Congress. The new fiscal anchor is one of the main economic measures of the Lula administration, and the decision to discuss it as an urgent matter could indicate it will be approved.

The bill is now expected to be discussed in Congress, possibly next week. If the fiscal anchor is approved by the Chamber of Deputies, it will then be submitted to the Senate.

Folha de S. Paulo: Em primeiro teste do arcabouço, Câmara aprova com folga regime de urgência 
G1:Por 367 votos a 102, Câmara aprova a urgência para o projeto do arcabouço fiscal
UOL: Tebet diz que arcabouço ‘foi aperfeiçoado’ pela Câmara e está otimista com aprovação da regra  

3. Petrobras announces end of international oil price parity

This week Petrobras announced that fuel prices in Brazil will no longer be adjusted according to international fluctuations in the prices of oil and the dollar. According to Petrobras, prices will be readjusted with no pre-determined frequency. This means the company will have the flexibility to practice more competitive prices, enjoying production and logistics conditions and competing with other actors currently selling in Brazil, such as distributors and importers.

Since 2016, prices were adjusted according to international fluctuations through the “Import Parity Price (PPI),” in which the price of oil in the global market and other logistics costs were considered.

G1: Petrobras anuncia fim da paridade de importação do petróleo e nova política de preço para combustíveis 
Agência Brasil: Entenda o que muda na política de preços dos combustíveis 
O Globo: Petrobras aprova nova política de preços para gasolina e diesel, com fim da paridade de importação. Entenda

4. IMF increases GDP growth projection

The International Monetary Fund (IMF) estimates that the Brazilian economy will register 1.2% Gross Domestic Product (GDP) growth in 2023. The upward revision in the prediction was made after IMF representatives visited Brazil to assess public spending. The Fund had previously projected GDP growth of 0.9%. According to the IMF document, the Fund also expects an improvement in 2024, with growth of 1.4%.

For 2025, the growth projection is 2%. The Fund praised the fiscal efforts of the Brazilian government and the current monetary policy of the Central Bank to reduce inflation.

O Globo: FMI melhora projeção de crescimento do PIB brasileiro e defende atuação do Banco Central
Infomoney: FMI melhora projeção para PIB do Brasil em 2023 e recomenda esforço fiscal “mais ambicioso”
Valor Econômico: FMI prevê Brasil como 25º pior desempenho global até 2026

5. Banks reduce credit concessions for large corporations

Banks have reduced credit concessions for large corporations in the first quarter of 2023. This is due to high interest rates and the crisis caused by the fallout from a major Brazilian retail company being accused of accounting fraud.

Combined, Brazilian banks had a loan and financing reserve of around R$678.7 billion for large corporations in Q1 2023, or 1.4% less than what was offered at the end of 2022. The current reserve is 4.9% larger than in the first quarter of 2022.

Valor Econômico: Haddad: Adesão do Brasil à OCDE pode ser interrompida por causa de voto de qualidade no Carf
CNN: Em carta a Haddad, OCDE sugere volta do voto de qualidade no Carf