The Brazilian government is using tax cuts over some managed prices to hold inflation.

The next six months are expected to feature high inflation, above 6% in the 12-month period. To try and help inflation indices to decline, the government decided to focus its actions on a “surgical” intervention in some prices, whether by cutting taxes or seeking other alternatives.

Managed prices account for 28.9% of IPCA and represent around 28 goods and services included in the basket of the inflation index. The problem is that managed prices (i.e. the ones the government can control) are not those that are rising the most in the country.

Source: Valor

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