Brazil Inflation June 2016

Brazil

Brazil: Inflation eases to over-one-year low in June

July 8, 2016

Consumer prices in June increased 0.35% over the previous month. The print was below the 0.78% increase recorded in May and was a greater slowdown than market analysts’ expectations. The slowdown was largely broad-based across the index, with less pronounced increases in prices recorded across seven of the nine components of the index.

Inflation in June eased to 8.8% from May’s 9.3%. The result marked the lowest inflation level since May 2015. The easing in price pressures comes amid a backdrop of recession. In addition, the effect of a number of price adjustments is beginning to fade. Despite the fall, inflation remains far above the Central Bank’s tolerance margin of plus/minus 2.0 percentage points around 4.5%.

Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2016 at 7.1%, which is unchanged from last month’s forecast. For 2017, the panel expects inflation of 5.3%.


Author: Angela Bouzanis, Senior Economist

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Brazil Inflation June 2016 0

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


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