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Brazil Risks Losing Grip on Inflation, Ex-Central Banker Warns

BRAZIL

Brazil may lose control over inflation ahead of the 2022 presidential election if the government fails to implement cost-cutting measures this year, according to a former central bank director.

  • Schwartsman sees risk of fiscal dominance without reforms
  • Policy makers have held key rate at record low to help economy

Lawmakers need to back structural reforms to ensure public debt, now approaching 100% of gross domestic product, returns to a sustainable trajectory, Alexandre Schwartsman said in an interview. Lack of a credible fiscal plan would eventually undermine the central bank's ability to carry out monetary policy (BBG)

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