Brazil Inflation January 2017

Brazil

Brazil: Inflation falls to lowest level since September 2012

February 8, 2017

Consumer prices in January increased 0.38% over the previous month, which was above December’s 0.30% rise and undershot the 0.48% figure analysts had expected. The rise in consumer prices was driven by higher prices for food and drinks, while transportation prices rose significantly, albeit at a more moderate pace than in December.

Inflation dropped from 6.3% in December to an over four-year low of 5.4%. The sharp fall has ramped up speculation that the Central Bank could cut the SELIC interest rate at the next monetary policy meeting to support an economic recovery. Inflation is within the Central Bank’s target band of 2.5%-6.5%.

Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2017 at 4.7%, which is down 0.1 percentage points from last month’s forecast. For 2018, the panel expects inflation of 4.6%.


Author: Angela Bouzanis, Senior Economist

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