Utility Management Group
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Energy and inflation (Brazil)
Energy and inflation
Inflation in Brazil affects the energy market mainly on the demand side.
How so?
For now, prices on the free (deregulated) market are "super behaved". And they are the ones who define the electricity costs of large companies and institutions, as they are predominantly free consumers.
On the other hand, the purchasing power of the vast majority of the population is - still - greatly affected by inflation. So demand of power associated with selected sectors tends to be weak.
So the most predictable consequence is that energy will remain "well behaved" because demand is very low and there is no realistic expectation on the horizon that we will have a "turn around".
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