Brazil Inflation May 2017

Brazil

Brazil: Inflation falls to lowest level in over a decade

June 9, 2017

Consumer prices in June decreased 0.23% over the previous month, which contrasted May’s 0.31% increase. The drop came on the back of falls in a number of categories across the index, including lower prices for housing, transport, and food and beverages.

Inflation continued to drop in June, falling to an over decade low of 3.0% (May: 3.6%). The result was below the Central Bank’s target range of 4.5% plus/minus 2.0 percentage points and is good news for the battered economy. The sharp fall will give the Central Bank space to continue with its easing cycle to support a recovery and should help support household spending.

Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2017 at 3.8%, which is down 0.2 percentage points from last month’s forecast. For 2018, the panel expects inflation of 4.3%.


Author: Angela Bouzanis, Senior Economist

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