Brazil Inflation Hits 4.63% in October, Above Central Bank Goal
Brazil’s annual inflation reached 4.63% in October, the national statistics agency IBGE said on Thursday, remaining above the central bank’s target range even though prices rose more slowly than economists expected. The figure was up slightly from 4.58% in September but below the 4.73% forecast in a Reuters poll. Consumer prices rose by 0.14% during the month, a sharp slowdown from the 0.82% increase recorded in September.
Food prices rise as transport and housing ease
Higher food and drink prices drove the monthly increase, rising by 1.04% in October, according to IBGE. Transport costs fell by 0.59% and housing costs by 0.51%, helping to hold the overall monthly figure down. Inflation over the first ten months of the year now stands at 4.10%.
Interest rates held at 13.75%
The central bank targets annual inflation of 3%, with a tolerance band of 1.5 percentage points either side, putting the top of the range at 4.5%. At 4.63%, inflation is therefore still above the bank’s goal. Last week the bank paused the easing cycle it began in March and held its benchmark Selic rate at 13.75%, saying it would keep using high interest rates to bring persistent inflation under control.
The figures come a month after President Luiz Inácio Lula da Silva won re-election, a result that has weakened the Brazilian real and pushed up long-term interest rates and inflation forecasts. Economists will now watch whether the softer monthly reading marks the start of a steadier fall in prices, or whether food costs keep annual inflation above target in the months ahead.
