SÃO PAULO— Inflation is surging in Brazil, forcing a country with one of the highest death rates from Covid-19 to grapple with the economic fallout of the pandemic.

While the global economy is forecast to rebound more than 4% next year, including in countries bordering Brazil, more economists expect Brazil to remain stuck in recession during 2022 as it battles one of the world’s highest annual inflation rates of 10.7%.

“Brazil really stands out—its inflation rate has risen much faster than almost any other emerging economy, and you can really see that hitting consumers,” said William Jackson, chief emerging-markets economist at the London-based research firm Capital Economics.

Inflation rates from Canada to Germany have climbed to the highest level in decades as businesses and consumers emerge from lockdowns, boosting energy prices and prompting supply bottlenecks. U.S. inflation hit a 39-year high in November, the government reported Friday. 

Brazil, which suffered punishing hyperinflation in the 1980s and 1990s, has faced a tougher struggle against its old nemesis—one that economists said could weigh on growth for at least the next year. Credit Suisse and Itaú Unibanco, one of Brazil’s biggest banks, cut their growth forecasts recently and now predict the country’s economy to contract 0.5% next year.

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