Brazil Inflation June 2017


Brazil: Inflation falls to lowest level in 18 years

September 6, 2017

Consumer prices in August rose 0.19% over the previous month, which was below July’s 0.24% rise and notably undershot analysts’ forecasts of a more pronounced 0.31% rise. The deceleration came on the back of falling prices of food and beverages, thanks to a plentiful harvest this year. However, prices for transportation rose, chiefly due to a recent tax hike on fuel.

Inflation continued to drop in August, falling to 2.5% (July: 2.7%). The result marked the lowest inflation since February 1999 and is good news for the battered economy. The sharp fall will give the Central Bank space to continue with its easing cycle to support a recovery and should help support household spending.

Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2017 at 3.7%, which is unchanged from last month’s forecast. For 2018, the panel expects inflation of 4.2%.

Author: Angela Bouzanis, Senior Economist

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Brazil Inflation Chart

Brazil Inflation August 2017 1

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

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