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Brazil Inflation February 2024

Brazil: Inflation holds steady in February

Inflation came in at 4.5% in February, unchanged from January’s figure. February’s result marked the joint-lowest inflation rate since July 2023 but still beat market expectations of a slowdown. Looking at the details of the release, the print reflected prices for transportation rising at a steeper pace, as did prices for food and beverages. These were offset by slower housing and utilities price growth.

Meanwhile, the trend pointed down mildly, with annual average inflation coming in at 4.4% in February (January: 4.5%). More positively, core inflation receded to a 32-month low of 4.7% in February (January: 5.1%).

Finally, consumer prices rose a seasonally adjusted 0.83% in February over the previous month, accelerating from January’s 0.42% increase. February’s uptick marked the highest reading in a year, surprising markets on the upside.

Going forward, average inflation will remain within the Central Bank of Brazil’s tolerance band of 1.5–4.5% through Q4 2024. Inflation is seen averaging above the mid-point of the target Q4 2025, but that will likely not deter the Central Bank from continuing to cut rates at its coming meetings.

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