Inflation in Brazil, the largest economy in Latin America, returned to growth in October and has already accumulated 6.47% in the past 12 months. This ended a three-month downturn, the government reported Thursday.
In October alone, consumer prices increased by 0.59%, compared to the 0.29% decline recorded in September, according to data released by the Brazilian Institute of Geography and Statistics (IBGE).
The October result was influenced by the new 0.72% increase for food and beverages.
It was also affected by the increase in the transport sectors (+ 0.58%), especially airline tickets, and health (+ 1.16%), in particular personal hygiene products and medical insurance.
Food and transport are the two groups with the greatest weight in the index and both showed a positive change in October, after the declines in September.
In the case of transport, “in addition to the 27.38% increase in tickets, the 1.27% drop in fuel prices was also important, less intense than the previous month, when they decreased by 8.50 %, “Pedro Kislanov, head of research at IBGE, said in a statement.
“There is a stark contrast, because food and transport, the two groups with the highest weight (in the consumer price index), had a negative change in September and increased in October,” explained Kislanov.
According to analysts, perhaps one of the causes was President Jair Bolsonaro’s decision to strengthen social assistance to increase his chances of being re-elected, a scenario that was interrupted with the defeat in the presidential ballot against Luiz Inácio Lula da Silva on the 30th. December. October.
In September, prices had fallen by 0.29%, adding to the declines in July (-0.68%) and August (-0.36%).
Brazil’s GDP grew by 1.2% in the second quarter compared to the previous three months, after an increase of 1.1% in the first.
In this way, inflation in Brazil interrupts a sequence of three consecutive downwards months, with falls of 0.68%, 0.36% and 0.29% in July, August and September respectively.
Forecasts
If this trend continues, it will exceed the target set by the Central Bank of Brazil for this year, which is inflation of 3.5%, with a tolerance margin of 1.5 percentage points up or down.
This will be one of the biggest challenges for Lula da Silva’s government, which will take office on January 1st. This is why analysts and economists are very attentive to appointments that the president-elect does in that area.
Despite the price expansion, October was less inflationary than in the same month in 2021, when the HICP was 1.25%. Last year, the country hit its highest inflation in six years.
Meanwhile, the accumulated inflation in 2022 reached 4.7%.
The Brazilian financial market expects prices to eventually rise by 5.63% this year, even exceeding the target ceiling of 5%.
The rise in inflation has led the Central Bank to raise official interest rates to 13.75% per annumrate that it decided to maintain in its last meetings in the face of the slowdown in prices recorded in the third quarter.
Source: Agencies
CB extension
Source: Clarin
