Brazil: Inflation continues to accelerate in November as food prices surge
November 23, 2010
According to the mid-month price index (IPCA-15, indice de Precos ao Consumidor Amplo), consumer prices added 0.86% over the same period last month following on a 0.62% increase in mid-October. The reading, which overshot market expectations of a 0.72% increase, was driven by rising food and beverage prices. Food and beverages account for more than 20% of the consumer price index and surged 2.11% in the period through mid-November. The spike in food prices reflects a temporary supply shock, which has quickly passed through to consumer prices in the context of rising wages and historically low unemployment. As a result of the higher-than-expected price increase, annual inflation jumped to 5.5% in mid-November (mid-October: 5.0% year-on-year). According to the IPCA-15 index, inflation has now exceeded the Central Bank's target rate of 4.5% for a third consecutive month. Data for the full month will be released on 8 December.