BRAZIL'S INFLATION FEARS MAY SHAPE POLITICS

BRAZIL'S INFLATION FEARS MAY SHAPE POLITICS

The prospect of hyper-inflation may shape Brazil's politics this year.

After an annual inflation rate of 365 percent in 1987, Brazil checked in with a monthly inflation rate of 17 percent in January. There are fears that by March the monthly inflation rate could approach 25 percent. Some fear the annual inflation rate could surpass 1,000 percent.I think an election this year is more possible as inflation goes up, said Miguel Colassuono, president of Brazil's National Economic Council. If it's over 25 percent, I don't think anyone can stop the idea of an election.

Brazil is writing a new constitution but as economic pressures mount, the constituent assembly drafting the constitution could include a provision mandating a presidential election in 1988.

Mr. Colassuono said that this spring also will be critical for Brazil

because it's possible that by April, Brazil won't have sufficient funds to meet its public payroll.

Many analysts complain that because of the political uncertainty and the weak mandate ofPresident Jose Sarney, Brazilian economic policy lacks coherence and direction.

The question is how long people can endure this standby situation because the reality is that they are getting poorer and poorer, said Mr. Colassuono, who was in Miami last week.

Because the Brazilian Democratic Movement Party (known by its Portuguese acronym, PMDB), the coalition that is Brazil's largest political party, is so fragmented, Mr. Colassuono said he thought it would be difficult for the party to mount a cohesive presidential campaign.