Brazil inflation rises 0.07% in July, outpacing forecasts
Consumer prices increased modestly, defying expectations for a flat reading as food and transport costs offset declines in fuel. Annual inflation remains below the central bank's target.
Brazil's consumer prices rose 0.07% in July, exceeding forecasts for a flat reading, government data showed.
The monthly increase, reported by the Brazilian statistics agency IBGE on Wednesday, was driven by higher costs for food and beverages and transport services. Food prices climbed 0.47%, while transport costs advanced 0.22%, offsetting a 1.45% decline in fuel prices.
On an annual basis, inflation slowed to 3.99% from 4.23% in June, remaining below the central bank's 4.5% target for 2024. The central bank has maintained its benchmark Selic rate at 10.50% since August 2023, citing inflation risks and policy caution.
Economists polled by Reuters had expected a 0.00% monthly change in consumer prices. The surprise uptick in July may temper expectations for imminent monetary easing, though annual inflation remains within the target range.
The central bank's next policy meeting is scheduled for September 18, where policymakers will assess inflation dynamics amid mixed economic signals. Brazil's inflation has eased from a peak of 10.06% in early 2023 but remains sensitive to food and energy volatility.
Elena covers macroeconomic data and policy across the eurozone, translating industrial output, inflation and growth figures into what they mean for markets.
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