Inflation in Brazil was down to 5,79% in 2022, from 10,06% in 2021.
While countries around the globe struggled with high inflation in 2022, Brazil reached one of the lowest rates among the G20 nations. The benchmark IPCA, a consumer price index (Índice Nacional de Preços ao Consumidor Amplo) reached 5,79% in 2022 – missing the government target but still closing at a lower rate than in 2021 when the index stood at 10,06%.
Furthermore, the benchmark interest rate Taxa Selic is set at 13,75% per year, higher than the European (0,75%) and US (2,5%) rates. Since inflation is well below the interest rate, Brazil now has one of the highest real interest rates in the world, representing an outstanding opportunity for both local and foreign investors.
Will inflation in Brazil rise?
Disinflation is likely to continue in Brazil, driven by “tight financial conditions, stuttering economic growth, and broad tax waivers to bring prices down”, says Reuters. However, according to the consultancy agency Capital Economics, the Central Bank of Brazil will wait for stronger signs of disinflation before dropping the interest rate — which should reach 11% by the end of 2023.
Looking further: what to expect from the Brazilian economy in 2023
Brazil’s GDP is projected to grow by 1% in 2023, according to Nasdaq. Agricultural production is predicted to be one of the main growth drivers: the Companhia Nacional de Abastrecimento (Conab), Brazil’s National Supply Company, estimates that the national grain production will be 15% higher than the previous harvesting season.
Further, the Brazilian economy is set to become one of the top 10 economies in the world. Forecasts show that, by 2024, the Brazilian economy will rank 9th as one of the largest economies in the world. The country is already Latin America’s largest economy and is currently in the 12th spot, according to 2022 GDP estimates.
Keep up with the latest trends in the Brazilian market and boost your online sales in Brazil
In the past 10 years, e-commerce in Brazil went from an emerging industry to Latin America’s largest digital market. Over the past decade, e-commerce revenue went from BRL 22,5 billion in 2012 to an astonishing BRL 170 billion in 2022.
Just like e-commerce, digital payments in Brazil have also evolved. This industry, first predominated by credit cards, in addition to the boleto bancário, now opens space to Pix, Brazil’s instant payment method, along with other solutions.
Want to learn more about the payment trends for 2023? Download our e-book and boost your online sales in Brazil!