LONDON | Is there in these recent Brazil’s data a lesson for those in the Old Continent whose only talk is internal devaluation via salary cuts to regain competitiveness, while keeping the common currency too high for irrational fear of the inflation ghost? March brought a negative surprise with consumer credit non-performance rates in Brazil, which ticked up to 7.6% after having fallen to 7.4% in February. But that shouldn’t be…
By Luis Arroyo, in Madrid | I give you today a couple of graphics, which measure how the process of internal devaluation is going in that peripheral crown, Spain. First, the industry labour costs (wages, red line) and producer prices. Then, industrial production. Everything in annual variations. As readers can see, the boom years were not quite as buoyant in terms of industrial production. Meanwhile, wages were well above the prices, at 4%, trimming production margins. It is a reflection of the brick-and-morter boom, which revitalised wages and sturdy houses…