{"id":99092,"date":"2026-07-07T23:25:22","date_gmt":"2026-07-08T02:25:22","guid":{"rendered":"https:\/\/murray.adv.br\/?p=99092"},"modified":"2026-07-07T23:25:22","modified_gmt":"2026-07-08T02:25:22","slug":"el-nino-raises-inflation-risks-morgan-stanley-says","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/el-nino-raises-inflation-risks-morgan-stanley-says\/","title":{"rendered":"El Ni\u00f1o raises inflation risks, Morgan Stanley says"},"content":{"rendered":"
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Bank estimates a 0.84-percentage-point impact on inflation in its baseline scenario but warns the effect could double to 1.68 percentage points<\/em><\/h6>\n<\/div>\n<\/div>\n
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Morgan Stanley economists are increasingly concerned about the potential impact of El Ni\u00f1o on Brazil\u2019s economy, particularly on inflation. The U.S. bank\u2019s baseline scenario assumes a moderate climate pattern but already points to significant effects on the country\u2019s consumer price index. A stronger El Ni\u00f1o, however, could amplify those pressures and make it more difficult for Brazil\u2019s Central Bank to follow its usual strategy of looking through weather-related inflation shocks.<\/p>\n<\/div>\n

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Under Morgan Stanley\u2019s baseline scenario, El Ni\u00f1o would add a cumulative 0.84 percentage point to Brazil\u2019s official consumer price index (IPCA), with 0.34 percentage point in 2026 and 0.50 percentage point in 2027. Economists Thiago Machado and Ana Madeira expect the climate pattern to peak in the fourth quarter of this year.<\/p>\n<\/div>\n

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Based on that scenario, the bank forecasts inflation at 5% at the end of this year and 4% in 2027, assuming food inflation of 7.2% in 2026 and 5.2% next year.<\/p>\n<\/div>\n

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\u201cIn a strong El Ni\u00f1o scenario, more severe droughts and floods could significantly reduce agricultural productivity, increase transportation costs, and trigger sharp rises in food prices\u2014particularly for coffee, sugar, grains, and perishable products\u2014potentially adding 1.26 percentage points to the IPCA,\u201d the Morgan Stanley economists wrote.<\/p>\n<\/div>\n

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The bank also outlined a third scenario involving a very strong El Ni\u00f1o. Under those conditions, a sharp acceleration in food prices could add as much as 1.68 percentage points to headline inflation, \u201cwell above the range historically observed during strong El Ni\u00f1o episodes,\u201d the economists said.<\/p>\n<\/div>\n

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The bank\u2019s assessment underscores heightened concern about the inflation outlook and its implications for monetary policy. Even so, Machado and Madeira believe the bar for further increases in the Selic policy interest rate remains high, even under a strong El Ni\u00f1o scenario.<\/p>\n<\/div>\n

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\u201cPast episodes suggest the Central Bank does not respond mechanically to El Ni\u00f1o-driven food inflation, and the current disinflation in oil prices should provide some short-term relief for inflation,\u201d the Morgan Stanley economists said.<\/p>\n<\/div>\n

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They cautioned, however, that the current environment already favors a more hawkish monetary policy stance because of inflation risks stemming from unanchored inflation expectations, resilient economic activity supported by fiscal measures, and expectations of higher global interest rates.<\/p>\n<\/div>\n

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That combination of factors, they argued, \u201creduces the room for the Central Bank to simply look through an El Ni\u00f1o episode, especially if it proves to be strong or extreme.\u201d<\/p>\n<\/div>\n

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As a result, Morgan Stanley sees a risk that the monetary authority may be unable to resume its monetary easing cycle by December.<\/p>\n

*By\u00a0Victor Rezende\u00a0\u2014 S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bank estimates a 0.84-percentage-point impact on inflation in its baseline scenario but warns the effect could double to 1.68 percentage points     07\/07\/2026 Morgan Stanley economists are increasingly concerned about the potential impact of El Ni\u00f1o on Brazil\u2019s economy, particularly on inflation. The U.S. bank\u2019s baseline scenario assumes a moderate climate pattern but already […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[27009,27010],"class_list":["post-99092","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-el-nino-raises-inflation-risks","tag-morgan-stanley-says"],"yoast_head":"\nEl Ni\u00f1o raises inflation risks, Morgan Stanley says - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/el-nino-raises-inflation-risks-morgan-stanley-says\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"El Ni\u00f1o raises inflation risks, Morgan Stanley says - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Bank estimates a 0.84-percentage-point impact on inflation in its baseline scenario but warns the effect could double to 1.68 percentage points     07\/07\/2026 Morgan Stanley economists are increasingly concerned about the potential impact of El Ni\u00f1o on Brazil\u2019s economy, particularly on inflation. 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