Brazil: Inflation ticks up in May
June 8, 2018
Consumer prices rose 0.40% in May over the previous month. The result was above April’s 0.22% rise and market expectations of a softer 0.30% increase. The uptick was driven by higher prices for housing, transport, and food and beverages.
Inflation edged up to 2.9% in May from 2.8% in April. Inflationary pressures remained subdued and inflation came in just below the lower threshold of the Central Bank’s target range of 4.5% plus or minus 1.5 percentage points. Annual average inflation was stable at an over-decade low of 2.8% in May. Inflation should accelerate in June as a result of a trucker strike at the end of May where blocked highways led to shortages and supply constraints, which will have likely fueled rising price pressures.
Brazil Inflation Forecast
Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2018 at 3.7%, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel expects inflation of 4.2%.
Author: Lindsey Ice, Economist