Investor Presentaiton
Annual Report
AR
2022
SUMMARY
WHO WE
ARE
OUR
STRENGTH
AND
OUR
RESOURCES
OUR
RESULTS
Business model and external outlook
In recent years, the global economy has undergone changes
that significantly affected society. Remote work became a
reality for a considerable part of the world's population.
Digital means were increasingly adopted for acquiring goods
and services and doing business. Countries around the world
have taken actions to hasten the transition to sustainable,
clean energy production. The Covid-19 pandemic-and later
the Russian-Ukrainian war - accelerated even more these
changes.
At the beginning of the pandemic, the global economy was
expected to face depression. This scenario was prevented
by the implementation of economic support programs
by governments. These programs expanded the supply
of liquidity in the economy and were able to alleviate the
suffering of households and prevent many companies from
going out of business.
While helping to soften the most immediate effects of
the pandemic on the economy, the support policies also
produced unanticipated effects. Cost increases in various
sectors of the global supply chain are an example of this, as it
is the imbalance between the economic activity of goods and
service sectors. It is also noteworthy the increased demand
for energy in a context of energy transition. Another effect
of the crisis measures was to raise the level of liquidity in
the global economy, which has inadvertently intensified
investors' search for yield on global markets.
The war between Russia and Ukraine has contributed
to intensifying this adverse scenario, bringing energy
difficulties to Europe and problems in the fertilizer sector.
Governments have responded with new packages of
measures to address rising food and energy prices. All
these elements have produced a complex environment
for the future, in which inflationary pressures will be more
persistent. In this new context, demand shocks are likely to
make inflation more volatile.
Looking ahead, 2023 should present a challenging scenario
for global economy and for emerging countries. Global
economy tends to slow down in 2023. In this scenario,
rising international interest rates promote an increase in
international financing costs, a decrease in capital flows
to emerging economies, and a tightening of financial
conditions. The focus on fiscal balance and structural reforms
will be essential to promote sustainable and inclusive
growth. Therefore, despite the recent improvement in the
inflationary picture, it is important to note that inflationary
pressures will still be present in 2023. Accordingly, it is
necessary that the BCB remain vigilant and active in fighting
inflation.View entire presentation