Brazil: Inflation drops to lowest level since March 2021 in October

Inflation fell to 6.5% in October, below September’s 7.2%. October's reading represented the weakest inflation rate since March 2021, and the fourth consecutive month of easing inflation. Despite the sharp moderation, October’s rate remained well above the Central Bank’s 3.5% target for 2022. Looking at the details of the release, the moderation was chiefly driven by prices for transportation growing at a softer rate in October, while prices for food and beverages also increased at a softer pace.

Accordingly, the trend pointed down, with annual average inflation coming in at 10.1% in October (September: 10.4%).

Lastly, consumer prices rose a seasonally adjusted 0.59% over the previous month in October, contrasting the 0.29% drop logged in September. October's figure marked the strongest increase in prices since June, and was the halt to a three-month sequence of declining prices.

FocusEconomics Panelists participating in the LatinFocus Consensus Forecast see inflation ending 2023 at 4.9%, which is unchanged from last month’s forecast, and 2024 at 3.6%