Brazil: Inflation eases in January
Consumer prices increased 0.21% month-on-month in January, following December’s sharp 1.15% increase. The reading underwhelmed market expectations of a 0.34% rise and came in tandem with a sharp depreciation in the Brazilian real. Lower food and beverage costs, particularly as meat prices receded after surging at the end of last year, and cheaper health and personal care. Conversely, housing registered the highest price increases in January.
Inflation edged down to 4.2% in January from 4.3% in December, which was comfortably within the Central Bank’s target of 4.0% with a tolerance band of plus or minus 1.5 percentage points for the end of 2020. Annual average inflation, on the other hand, increased to 3.8% in January from 3.7% in December.