Brazil's consumer price inflation slowed in April, but not enough to prevent the 12-month rate from remaining well above the central bank's target. The consumer-price index, IPCA, rose 0.71% in April, compared with a rise of 1.32% in March, the Brazilian Institute of Geography and Statistics, or IBGE, said in its latest release.
Still the 12-month IPCA was up 8.17% through April--higher than 8.13% in March--remaining well above the central bank's 6.5% ceiling.
The monthly inflation data was in line with expectations. Economists anticipated an increase of between 0.65% and 0.92%, and Central bank chairman Alexander Tombini had forecasted that in April consumer prices would decline.
The deceleration in monthly inflation comes after the government raised prices for items including transport and electricity at the year’s outset. President Dilma Rousseff’s administration also reinstated a gasoline tax as part of efforts to raise revenue and avoid a sovereign downgrade.
However with twelve month inflation remaining well above its target, the central bank continued to increase its Selic base rate. The monetary authority raised its benchmark interest rate by half a percentage point, to 13.25%, at its monetary policy meeting in April, and is expected by economists to implement at least one more increase at its next rate decision in June.
The IBGE report indicates that Food and beverage prices in April rose 0.97% after a 1.17% rise in March; Housing prices rose 0.93% after a 5.29% jump the prior month because of increases to electricity rates. Household articles was up, 0.66%; Apparel, 0.91%; Transport, 0.11%; Health and personal care, 1.32%; personal expenses, 0.51%; Education, 0.21% and Communications, 0.31%.