Brazil’s central bank chief says China’s low-cost imports have eased inflation

Brazil’s central bank president, Gabriel Galipolo, said on Monday that China is exporting “disinflation or even deflation” to Brazil through a surge in low-cost imports, easing inflation.

Speaking at an economics forum in São Paulo, Galipolo said Brazilian imports from China have grown while their prices have fallen, easing inflation in the short term but reflecting deeper imbalances in global trade. “It is, in a sense, offsetting an impact that would otherwise be even greater, both for the current account deficit and for inflation,” he said.

Disinflation refers to a slowdown in the pace of price increases, while deflation means an outright fall in prices, both seen by economists as signs of weakening demand that can discourage investment and spending and hurt growth even as prices drop.

Galipolo’s remarks came as Brazilian officials confront the effects of what economists describe as China’s industrial oversupply. After years of relying on property construction to fuel growth, Beijing has shifted investment into manufacturing. Factories producing cars, batteries, steel and textiles now exceed domestic demand, pushing Chinese firms to sell abroad at sharply lower prices.

For Brazil, the trend has a double edge. Cheaper goods from China help restrain inflation, allowing the central bank to keep interest rates stable, but they also undercut local manufacturers that struggle to compete on price.

  

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