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Inflation has doubled since Geddes said he heard thanks in the supermarket - 05/24/2022

Inflation has doubled since Geddes said he heard thanks in the supermarket – 05/24/2022

A year has passed, but without any celebrations or remembrances, one of the most famous of the many and astonishing statements made by Economy Minister Paolo Guedes has passed.

On March 12, 2021, Guedes stated, in a virtual event on the Jota news site, that, When he went to the supermarket, people were thanking him. “Sometimes they say: ‘We pray for you, we feel what you do for us,'” Geddes added.

The statement sounded startling not only because the prices, at that very moment, began to rise even higher. It was also surprising because no one had seen Guedes in a supermarket, at least since the economist took office.

Dropping dummy phrases is typical of Guedes. “Brazil will surprise the world”, “we will make a liberal revolution”, “we will privatize a trillion reais”, “with 3 billion reais, 4 billion reais or 5 billion reais, we will eradicate the virus” – these are some of the many, many surprising statements to the minister. All of his announced grand plans are for “next week”.

At that moment, at the end of the first quarter of 2021, Guedes was under pressure to increase spending in the fight against the second wave of covid-19. He was able to approve the PEC Emergencial, which opened up space outside the FSA base for the spending cap to come back with first aid. Monthly assistance of R$600, which was later reduced to R$350, expired at the end of 2020, and Guedes resisted accepting a new income transfer program for vulnerable people above an average of R$250 per month.

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The speech, unexpected and ignorant, was given thanks to Guedes when they saw him in the supermarket, in the context of tension in the government. At the same event, before it was announced that people at the supermarket said they were praying for him, Guedes denied that he had received “advance notice” or was considering leaving the government.

Guedes had the hallmarks of a delay in returning help. The then Minister of Economic Policy, Adolfo Sachida, now the Minister of Mines and Energy, at the end of 2021 issued an unrealistic diagnosis of the development of Covid-19. According to the opinion of the Ministry of Economy, published by Sachsida in November, the chances of a new wave of Covid-19 in Brazil were “very low”. The conclusion, which turned out to be tragically wrong, was based on an unsupported assessment, based on the premise that alleged herd immunity had already been achieved in the country.

By the time Guedes announced that people were thanking him for his work in government, the second wave of covid-19 exploded in Brazil. Meanwhile, Bolsonaro has been shouting against vaccinations and delaying the vaccination process. In June, the number of deaths from COVID-19 in Brazil reached 500,000. In all, to date, there have been 30 million infected and more than 660,000 deaths.

Inflation was also, at that time, at the end of the first quarter of 2021, starting to show that it was about to explode. In March, the IPCA (Indicator of Abundant Consumer Prices), which accumulated in 12 months, reached 6%, but in May it reached 8%, surpassing 10% in September.

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Since then, month after month, it’s been in the double digits, in the 12-month period, having topped 12% in April. May IPCA-15, released on Tuesday (24), continues to show upward pressure. It eased well from April, but still rose 0.59% month over month, the biggest rise for the month since 2016, advancing to 12.2%. Food prices, which scare people in the supermarket, continued their monthly rise.

Another escalation, the base interest rate (the interest rate), began in the same period as a reaction to the rise in inflation. In March 2021, Selic made its first post-parking jump since August 2020 at 2% annually, the lowest level since inflation targeting was adopted more than 20 years ago. It rose to 2.75% and did not stop climbing, and in May 2022 it reached 12.75%.

A year later, if Guedes went to a supermarket today, he might think, as the Internet tale goes, that he was in a church or temple. Inside, looking at the prices in the recall of products on display, you can just hear people chanting “Oh my God!” , “God forbid!” , “Oh my God!”.