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Brazil Inflation March 2024

Brazil: Inflation ebbs to nine-month low in March

Inflation dropped by more than markets had anticipated to 3.9% in March from February’s 4.5%. March’s result marked the weakest reading since June 2023. Looking at the details of the release, the moderation was driven by milder price pressures for transportation, as well as housing and utilities. Moreover, prices for clothing grew at a more subdued pace.

Accordingly, the trend pointed slightly down, with annual average inflation coming in at 4.3% in March (February: 4.4%). Meanwhile, core inflation waned to 4.3% in March, down from February’s 4.7% and marking the lowest print since May 2021.

Finally, consumer prices increased by a seasonally adjusted 0.16% in March over the previous month, a smaller increase than the 0.83% rise seen in February. March’s result marked the weakest reading since July 2023 and also surprised markets on the downside.

Our Consensus is for inflation to average around current levels—remaining comfortably within the Central Bank of Brazil’s 1.5%–4.5% tolerance band—during the remainder of 2024. That said, our panelists expect average inflation to remain above the mid-point of the band through Q4 2025.

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