Brazil: Inflation continues to accelerate, pushing up expectations for 2011
January 26, 2011
According to the mid-month price index (IPCA-15, indice de Precos ao Consumidor Amplo), consumer prices added 0.76% month-on-month during the 30-day period ended on 15 January, following on a 0.69% increase during the 30 days ended on 15 December. The reading overshot both market expectations of a 0.69% increase as well as the 0.52% rise recorded in January 2010. As a result, annual inflation inched up to 6.0% (December: 5.8%), which is above the Central Bank's target for a third consecutive month. The result was driven by rising food and beverage prices, influenced by higher commodity prices and to the effects of recent floods in Rio de Janeiro state. Food and beverages account for more than 20% of the consumer price index and increased 1.21% in the period through mid-January (mid-November: +2.11% month-on-month; mid-December: +1.84% mom). Moreover, the increase was widespread, with all nine categories recording higher prices compared to the previous month.