Brazil Inflation October 2016


Brazil: Inflation falls to 20-month low in October

November 9, 2016

Consumer prices in October increased 0.26% over the previous month, which was above September’s 0.08% rise. The print was below the 0.44% increase recorded in August and undershot market analysts’ expectations of a 0.28% rise. The rise in price pressures was due to an increase in transportation prices.

Inflation fell in October to a 20-month low of 7.9% from September’s 8.5%. Inflation has fallen notably this year, paving the way for a cut in the Central Bank’s SELIC interest rate to support an economic recovery. Despite the gains made, inflation still remains 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 down 0.2 percentage points from last month’s forecast. For 2017, the panel expects inflation of 5.0%, which is down 0.1 percentage points from last month’s estimate.

Author: Angela Bouzanis, Senior Economist

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Brazil Inflation Chart

Brazil Inflation October 2016

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

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