BRASILIA: A recent fuel tax hike likely kept Brazil’s monthly inflation speeding at around the highest rate in more than a decade in early February.
Consumer prices as measured by the IPCA-15 index probably rose 1.29 percent in the month to mid-February, up from 1.24 percent in the full month of January, according to the median of 25 estimates.
January’s monthly inflation clocked in at its highest since February 2003, fueled by jumps in electricity rates, bus and subway fares aimed at helping states narrow ballooning budget deficits.
On the federal level, the government also raised sales taxes on diesel and gasoline in early February.
Insufficient rain has also raised food prices, contributing to keeping annual inflation far above the government’s target of 4.5 percent.
In the 12 months to mid-February, consumer prices probably rose 7.34 percent in the 12 months, up from 6.69 percent in the 12 months to mid-January, according to the median of 22 forecasts in the poll.
Estimates for the monthly inflation rate in the month to mid-February ranged from 1.18 to 1.35 percent, and forecasts for the annual inflation rate varied from 7.20 to 7.76 percent.
High inflation has been one of Brazil’s biggest obstacles to faster economic growth in recent years as consumer confidence has plunged to decade lows, industries cut back on investments and interest rates climb back to double-digit levels.
The central bank, which has pledged to lower inflation back to 4.5 percent in 2016, is expected to raise its benchmark Selic rate from 12.25 percent to 12.75 percent later this year.
