Brazil’s consumer prices posted the first monthly decline in a year, easing inflationary pressures ahead of the central bank’s policy decision later this month.
The mid-August IPCA-15 consumer price index rose 4.24% from a year earlier, down from 4.52% in July and below economists’ median forecast of 4.34% in a Reuters poll. On a monthly basis, prices fell 0.40%, marking the first negative reading since August 2025, compared with a forecasted drop of 0.30%.
The decline was driven by lower housing costs, which fell 1.41% on the month, largely due to a one-off discount on electricity bills linked to the Itaipu hydroelectric dam. Transportation prices also decreased 1%, reflecting cheaper airfares and fuel, while food and beverage costs dropped 0.57%.
The central bank has already reduced its benchmark Selic rate by 25 basis points to 14% in its most recent move, the fourth consecutive cut. Annual inflation remains within the bank’s target range of 3%, plus or minus 1.5 percentage points. The next monetary policy meeting is scheduled for September 15–16, where further easing may be considered given the cooling price pressures.
The data suggests a gradual disinflationary trend in Latin America’s largest economy, though policymakers will weigh the pace of further rate reductions against inflation dynamics in the coming months.
