The Brazilian economy is going through a high level of idleness, suggesting a gradual economic recovery, said Carlos Viana, the Central Bank Director of Economic Policy, while presenting the Quarterly Inflation Report (IR) for the second quarter of 2018.
According to him, the economic effects of the truck drivers' strike point, at first, to a significant drop in activity and a significant jump in inflation in the short term, but this movement tends to be followed by a pronounced return.
"The challenge will be to read this data," Viana said.
For him, there was a rapid effect on food prices. Subsequently, however, there was a stabilization process, followed by a reversal in the inflationary process in some items. He added that in the case of prices linked to the services sector, there is also a smaller impact of the recent appreciation of the U.S. dollar against the Brazilian real.
Regarding employment, the director of the Central Bank observed that the labor market keeps a gradual recovery. In addition, he noted that the international scenario remains more challenging.
"The normalization of monetary policies in central economies has made the environment more challenging for emerging countries," he noted.