Deflation in Rio Puts After-Olympics Blues in the Spotlight
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Source: BFW (Bloomberg First Word)
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Henrique Meirelles (Brazil Secretaria do Tesouro National)
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(Bloomberg) -- Prices in Rio de Janeiro city extended deflation in mid-August despite the acceleration seen in the rest of the country. News, however, are far from being positive as the fall of Rio’s CPI is accentuated by the fiscal crisis that ravages the Olympics state.
- Civil servants’ unpaid wages and abandoned infrastructure assets in search of buyers lead the CPI to fall 0.16% in the August IPCA-15 index, against a decrease of 0.13% in mid-July, according to data from National statistics agency IBGE
- Rio is the Brazilian metropolitan region that presented the most accentuated deflation of prices
- "Very low inflation, or even deflation, in recent months is almost becoming a synonym of a non-growth path," said Coinvalores fixed-income strategist Paulo Nepomuceno
- Finance Minister Meirelles "is insisting thet we’re growing, but no, we’re not," said Nepomuceno
- Lack of control of the debt in Rio led to civil servants not receiving their salaries, which accentuated this deflation, he said
- From April to June, the unemployment rate in Rio increased to 15.6%, compared to 14.5% in the first quarter
- NOTE: Brazil CPI +0.35% M/m Through Mid-August; Est. +0.40%
- NOTE from Aug. 18: Dining with Madonna no more, Rio grapples with rising crime
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Henrique Meirelles (Brazil Secretaria do Tesouro National)
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UUID: 7947283