Inflation increases in May for first time in eight months

Inflation inched up to 3.9% in May, above April’s 3.7%. The acceleration was roughly in line with market expectations, and broke a seven-month streak of cooling price pressures. Looking at the details of the release, the pick-up was broad-based, with greater price pressures recorded for transportation, food and beverages, as well as housing and utilities. Meanwhile, the trend was unchanged, with annual average inflation remaining at April's 4.3% in May. Meanwhile, core inflation was also steady, coming in at April's 3.8% in May. Finally, consumer prices increased a seasonally adjusted 0.46% over the previous month in May, picking up from the 0.38% rise recorded in April.

Our Consensus is for the disinflation process to stall and inflation to stabilize close to current levels in what remains of 2024, at a level below 2023’s average. As such, inflation will remain within the Central Bank of Brazil’s 1.5–4.5% tolerance band but above the midpoint through the end of our forecast horizon in 2028. Extreme weather events, stronger-than-anticipated wage growth and a weaker-than-expected real are upside risks.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Brazilian inflation projections for the next ten years from a panel of 39 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Brazilian inflation.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Brazilian inflation projections.

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