BRASILIA (Reuters – Brazil’s central bank chief Roberto Campos Neto claimed that Omicron, a variant of coronavirus, has so far not had a large impact on Brazil’s economic performance. He said this because Brazil does not have restrictions regarding mobility.

Campos Neto was asked his opinion on Omicron’s effect on Brazil’s economy. He said that although cases were likely to still be underreported in Brazil that he believes that officials are not imposing mobility restrictions that would have allowed businesses to remain open.

He said that because mobility isn’t suffering as much there is a tendency for people to believe they won’t have much of an effect on the economy or not much at all.

Santander (MC) Bank hosted an online conference. He stated that China has not adopted any severe policies to control the variant. The biggest concern about Omicron is the disruption of supply, which could affect the global economy.

It is easy to notice the effects of goods being exported from China when you consider them. Campos Neto explained that even though it may be too late to know, any disruption to China’s supply chain will have an impact on everyone.

Brazil was badly affected by COVID-19’s initial waves, but Omicron is causing new records every day. The virus is spreading again to hospitals, although it seems less likely that severe diseases will be caused than in the past.

According to Reuters calculations, Brazil ranks third in the world for COVID-19 deaths after Russia and America.

Campos Neto’s aggressive tightening of monetary policy has been a result of double-digit inflation in Brazil. From 2% in March, the benchmark rate at the central bank was more than tripled to 9.25% last December. The central bank has signalled a further 150 basis points increase in February.

He claimed that the inflation rate in the service sector is “a cause for concern” and policymakers are closely monitoring it.

According to the latest FOCUS survey by around 100 economists, the market expects an inflation increase of 5.09% in 2022. This is well beyond the 3.5% government target.