Myriam Lettau says that the economy figures lie to the central bank

247 – in column Journalist Miriam Lettau, published in O Globo newspaper, confirms that economic figures lie to the Central Bank. According to her, BC argues that the antibiotic used so far has not suppressed economic infection, although the numbers do not support this assertion. There was a contraction in many prices, evidenced by the largest drop in history in the General Price Index – Market (IGP-M), which recorded -6.72%. In addition, there is constant inflation of other goods and services. Risk perception has also improved, as evidenced by credit default swaps (CDS), which have fallen by more than 80 points in three months.

The Central Bank analyzes the labor market and believes that employment is at a high level. While this seems like a positive thing, economists warn that very low unemployment could be a danger sign of rising inflation. In the May meeting minutes, the Monetary Policy Committee (Copom) stated that the labor market was resilient, with a net increase in jobs and a stability in the unemployment rate. However, Miriam Leitão raises doubts about whether the job market is really good and whether there is any growth in demand. She points out that data on economic activity, consumption, production, and investment tended to decline, and GDP for the first quarter was a point outside the curve.

The journalist says that it is difficult to reconcile economic and political logic, but when the central bank denies the obvious improvements in indicators, scenarios, prices and market analysis, this compromise becomes impossible. She points out that more than 90% of the financial market expected a drop in interest rates in August, but after the Cobum meeting, that number fell sharply. The change in expectations shows that monetary authority is forming negative expectations.

The country is in a dangerous phase, as it is normal for politicians and businessmen to criticize high interest rates, but if the central bank loses its reasons, the government may propose ending the independence of the institution. The columnist points out that until Copom’s next meeting, BC has time to change direction. Minutes will be issued later in the week and will be checked for any sign of flexibility. Moreover, on Thursday, the National Monetary Board will discuss the inflation target for the coming years.

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