Brazil Inflation


Brazil: Inflation rises to 6-year high

May 6, 2011

In April, consumer prices rose 0.77% over the previous month. The reading broadly matched the 0.79% increase tallied in March, but exceeded both market expectations of a 0.74% increase and the 0.57% rise recorded in April 2010. As a result, annual inflation stepped up to 6.5% (March: 6.3%), which is above the midpoint of the Central Bank's target of 4.5% ( 2.0 percentage points) for an eighth month in a row and marks the highest rate since July 2005. The pronounced monthly increase was driven by higher transport costs, which rose 1.57% over the previous month. Transportation prices have risen an accumulated 5.24% this year, due to soaring oil prices. In contrast, food prices rose a more moderate 0.58% and home appliances prices dropped over March. In April, the Central Bank raised its inflation forecast from the 5.0% previously expected to 5.6%.


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