http://www.bloomberg.com/news/2014-02-07/brazil-s-january-inflation-slower-than-every-economist-estimate.html
David Biller and Raymond Collit discuss how Brazil's inflation in the month of January was slightly lower than economists predicted. Economist estimated that Brazil's inflation would be at .61%, but in the month of Janaury was actually .55%. This was good news for Brazil as they try to cap price increase that has seen steady growth since April.
As consumer price increases declined from .64% to .60%, transportation prices also dropped by .03% in January. Transportation costs were a huge factor in slowing down prices. Though growth has become gradual, Brazil's currency vs the US, is the weakest it has been in the past five months.
Brazil has shown has shown commitment to focalize on inflation. The central bank plans to, "look to more currency intervention,
administered prices, and macro-prudential measures to cap price
increases." In five months, Brazil will be hosting the world cup, which could possibly have an enormous impact on inflation.
I think Brazil hosting the World Cup this summer will actually increase the inflation rate. Inflation is an increase in price level. The World Cup brings a lot tourist within a country, and I think this will become problematic. Business will become keener to increase their price of goods and service as a way of making more profit not realizing the effect they will be having in a long run. Also, the World Cup preparation alone, the government is expected to spend $13.3 billion on projects around the host cities. Lastly, I am eager to find out the result of Brazil hosting the World Cup as the government keeps on spending money.
ReplyDeleteYes Brazil is hosting the world cup this summer and that will help the economy out in many ways I believe. However with this great responsibility and fortune comes some negative aspects. Brazil will be under the microscope till the day they start the world cup. There economy that is struggling will be picked to pieces and so will there social structure. As this article says there inflation is not doing well. As for other articles I have seen they have talked about pollution, gang violence, and commuting time that makes the country seem less then desirable. Also they are extremely behind on funding and preparation on building for the world cup failing many of there preparation deadlines. If they are able to get past some of the negative media they get, and promote the great beaches and beautiful part of the country they will see there economy grow for the next couple of years. After the world cup they are also hosting the Olympics and if they can run a successful world cup even more people will flock to the stunning east coast of Brazil bringing larger forces and more companies to invest.
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