Brazil: Inflation falls to lowest level since 1998 in 2017
January 10, 2018
Consumer prices in December rose 0.44% over the previous month, above November’s 0.28% rise. December’s reading overshot analysts’ forecast of a less pronounced 0.30% rise. The increase was largely driven by higher prices for transportation, along with food and beverage products.
Inflation ended 2017 at 2.9% in December, a notch up from November’s 2.8% but notably below 2016’s 6.3%. The reading for 2017 marked the lowest annual inflation rate since 1998. Prices pressures fell notably last year thanks to a solid performance in the real economy and a battered domestic economy. As a result, the Central Bank missed its target of 4.5% plus or minus 1.5 percentage points and will have to publish an open letter explaining why, according to Brazilian law. Inflation averaged 3.5% in 2017, notably below 2016’s average of 8.7%.