Brazil: Inflation falls to over one-year low in September
October 7, 2016
Consumer prices in September increased 0.08% over the previous month, the lowest rise since July 2014. The print was below the 0.44% increase recorded in August and undershot market analysts’ expectations of a 0.18% rise. The reduction in price pressures was due to an almost across-the-board slowdown with only housing, clothing and communication showing faster growth in prices. In particular, lower prices were recorded for food in September, contributing to the subdued print.
Inflation fell in September to a 16-month low of 8.5% from August’s 9.0%. 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 far above the Central Bank’s tolerance margin of plus/minus 2.0 percentage points around 4.5%.