Brazil Inflation


Inflation remains unchanged in May

In May, consumer prices increased 0.37% over the previous month, which was below both the 0.55% rise recorded in April and market expectations of a 0.38% price increase. The rise was mainly driven by higher prices for housing as well as for food and beverages.

Despite the monthly price increase, annual headline inflation remained stable at 6.5% in May. As a result, inflation is now within the Central Bank's target of 4.5% with a tolerance margin of plus/minus 2.0 percentage points.

The Central Bank expects inflation to moderate to 5.7% by the end of this year and to ease further to 5.3% by the end of 2014. LatinFocus Consensus Forecast participants see IPCA inflation closing 2013 at 5.8%, which is up 0.1 percentage points from last month's forecast. For 2014, the panel sees inflation also at 5.7%.


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Brazil Inflation Chart

Brazil Inflation May 2013

Note: Annual and monthly var. of IPCA consumer price index in %.
Source: Brazilian Institute of Geography and Statistics (IBGE).

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