Brazil: Inflation rises to a 20-month high in June
July 5, 2013
In June, consumer prices 0.26% over the previous month, which was below both the 0.37% rise recorded in May and market expectations of a 0.34% price increase. The rise was mainly driven by higher prices for health and personal care as well as for housing.
As a result of the monthly price increase, annual headline inflation edged up from 6.5% in May to 6.7% in June, the highest level since October 2011. As a result, inflation is now above the Central Bank's target of 4.5% with a tolerance margin of plus/minus 2.0 percentage points.
The Central Bank expects inflation to moderate to 5.7% by the end of this year and to ease further to 5.3% by the end of 2014. LatinFocus Consensus Forecast participants see IPCA inflation closing 2013 at 5.8%, which is unchanged from last month's forecast. For 2014, the panel sees inflation also at 5.7%.