Brazil Inflation December 2020


Brazil: Inflation rises to over one-year high in December

January 12, 2021

Consumer prices increased a seasonally-adjusted 1.35% in December over the previous month, accelerating from the 0.89% rise seen in November. December's figure was the sharpest increase in prices since February 2003. Looking at the details of the release, housing prices rose at a quicker pace in December compared to the previous month, while prices pressures for transport also gained steam

Inflation came in at 4.5% in December, above November’s 4.3%. December's reading marked the highest inflation rate since May 2019. Meanwhile, annual average inflation was unchanged at November's 3.2% in December.

Commenting on the outlook for inflation, Alberto Ramos, economist at Goldman Sachs, noted:

“In our assessment, at this stage the main upside risk to inflation is financial rather than economic/demand. Failure to address medium-term fiscal sustainability concerns could generate pressures on the capital account, un-anchor the currency and inflation expectations and through those channels contribute to deteriorate what has been hitherto a rather benign inflation backdrop.”

Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2021 at 3.5%, which is up 0.1 percentage points from last month’s forecast. For 2022, the panel projects inflation to end the year at 3.3%.

Author:, Economist

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Brazil Inflation Chart

Brazil Inflation December 20 20

Note: Annual and monthly var. of IPCA consumer price index in %.
Source: Brazilian Institute of Geography and Statistics (IBGE).

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