Brazil: Inflation falls slightly in August
September 6, 2013
Consumer prices rose 0.24% in August over the previous month. The increase, which was above the negligible 0.03% rise recorded in July, was in line with market expectations. Prices increased in the majority of the categories monitored, with household items recording the highest rise.
Despite the minor monthly price increase, annual headline inflation fell from 6.3% in July to 6.1% in August. Thus, inflation remains within the Central Bank's tolerance margin of plus/minus 2.0 percentage points around the target of 4.5%.
The Central Bank expects inflation to moderate to 6.0% by the end of this year and to ease further to 5.4% by the end of 2014. LatinFocus Consensus Forecast participants see inflation closing 2013 at 5.9%, which is unchanged from last month's forecast. For 2014, the panel sees inflation at 5.8%.
Author: Carl Kelly, Economist