Saturday, February 6th 2016 - 05:31 UTC

Brazil's inflation at 12-year high in January driven by food and transportation prices

Brazil's inflation rate rose to a 12-year high, officials said on Friday, as Latin America's largest economy continues to struggle through a protracted recession. Driven by rising food prices, the annual inflation rate hit 10.71%, the highest since November 2003 and well beyond the central bank's target ceiling of 6.5%, said national statistics institute IBGE.

Food prices jumped 2.28% in January from 1.50% in December as a strong El Niño weather pattern caused floods and disrupted production of fresh vegetables

Transportation prices also rose sharply, by 1.77%, from 1.36% in December, lifted by a increase in urban bus fares and gasoline taxes, triggering violent street protests

Last month the central bank decided to leave the key interest rate untouched at 14.25%, fearing that raising it to combat inflation would only deepen the recession.

Meanwhile the January inflation rate was 1.27%, the highest recorded for the month of January since 2003 and accelerating from 0.96% in December.

Food prices jumped 2.28% in January from 1.50% in December as a strong El Niño weather pattern caused floods and disrupted production of fresh vegetables like tomatoes and onions.

It was the steepest monthly increase in food prices since December 2002.

Transportation prices also rose sharply, by 1.77%, from 1.36% in December, lifted by a increase in urban bus fares and gasoline taxes, triggering violent street protests last month, especially in Sao Paulo.

A separate inflation measure including wholesale prices also topped all market expectations earlier on Friday. The IGP-DI index calculated by the Getulio Vargas Foundation rose 1.53% in January, driven by high industrial prices as Brazilian currency, the real, trades near a record low.

The combination of spiraling prices and a contracting economy has put Brazilian policymakers in a very difficult situation.

Last month the central bank decided to leave the key interest rate untouched at 14.25%, fearing that raising it to combat inflation would only deepen the recession.

Brazil's economy shrank by more than 3% last year, and the International Monetary Fund is now predicting a 3.5% contraction this year -- a far cry from the strong growth the country posted in the 2000s.

Brazil has been hit hard by a corruption scandal at state oil giant Petrobras and an ensuing political crisis, which has caused much uncertainty and volatility in markets.

 

17 comments Feed

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1 ChrisR (#) Feb 06th, 2016 - 11:19 am Report abuse
DumbAss Dilma is to Brazil what TMBOA was to Argentina.

The one has gone, so the other needs to.
2 yankeeboy (#) Feb 06th, 2016 - 12:44 pm Report abuse
Food and Trasportaion
2 things that have the greatest use by the poor.

Lemme guess, the Marxist Monkeys will raise the montly free $ to poor people to make up for the inflation.

Total idiots.
3 L0B0MAL (#) Feb 07th, 2016 - 11:04 am Report abuse
With the international fuel price-range at it's lowest; the transport should actually become cheaper and should also help in controlling the inflation!

Unfortunately; it's the other way around! This is yet another proof that something is terribly wrong in Brazil!

- The government will need more R$ to spend and thus will keep increasing the taxes.
- Hyperinflation will soon return to Brazil.
- Lesser & lesser products will be sold
- Imports will become costlier.
- More & more industries/companies will be closed.
- Increase in the unemployment will accelerate.
- Brain-Drain has already begun.
- A revolt/violence by a part of the population is quite possible.
- “Emegency-State” may be declared.
- “Collor-Style Theft” is not unlikely.

Judging from such happenings & possibilities; the economy is rapidly snowballing - Completely Out Of Control.

A very - VERY - frightening scenario indeed!
4 Brasileiro (#) Feb 07th, 2016 - 03:30 pm Report abuse
Everything is going as planned: The complete isolation of the first world. Brazil's Soft Power is irresistible!
5 yankeeboy (#) Feb 07th, 2016 - 04:23 pm Report abuse
Everything is going as planned

Bahahahahahaa

Thank you that made my morning.
6 Brasileiro (#) Feb 07th, 2016 - 04:39 pm Report abuse
Europe is over. North America is trapped, scared. The QE-3 ended the possibility of any reaction. QE-4 is suicide of North America.
7 yankeeboy (#) Feb 07th, 2016 - 05:44 pm Report abuse
The USA is the only country that money is flowing into, its coming in the 100s of Billions a month from EU SoAm and China.

They say China is going to devalue this week while everyone is on vacation there.
Maybe as much as 25%
It won't help tho
and by next year
They'll be out of enough reserves to keep their economy afloat.
The magic number is U$2.8T
below that they are done.
:)
8 Brasileiro (#) Feb 07th, 2016 - 05:56 pm Report abuse
You live in a paradise that does not exist.

The world has changed and you do not!

www.youtube.com/watch?v=C_ccpgXfPoU&list=FLmXPTu1f8AdGlizWNiASx2A&index=9

“Se ao menos você soubesse.”
9 yankeeboy (#) Feb 07th, 2016 - 09:31 pm Report abuse
Your world has changed much more than mine has.

They just started telling pregnant women in Brazil not to kiss or have sex.

In the civilized world we'd call that COLLAPSE

What is kind of funny, all the problems you all are having now are directly related to bad gov't.
It really didn't take that long.
A decade and everything is a disaster.
Nope not too long at all
10 Brasileiro (#) Feb 07th, 2016 - 09:51 pm Report abuse
Man + woman = Yank Boy

Brasil + Brasil = Brasil

www.youtube.com/watch?v=dxi2vGPZyzA&list=FLmXPTu1f8AdGlizWNiASx2A&index=44
11 L0B0MAL (#) Feb 08th, 2016 - 11:39 am Report abuse
Brazil is in the hands of a Legalized Crime Syndicate. However; not ALL crooks in Brazil are Politicians.

In any case, the Brazilian Politicians and Diapers have one thing in common. BOTH should be changed - regularly - and for the same reason.
12 yankeeboy (#) Feb 08th, 2016 - 01:22 pm Report abuse
Very soon someone's going to call PBR loans.
Then we'll see some fun times.

As PBR goes so does Brazil.
:)
13 L0B0MAU (#) Feb 08th, 2016 - 02:57 pm Report abuse
Brazil becoming “Venezuela” - sooner if not later.
14 Jack Bauer (#) Feb 10th, 2016 - 03:05 pm Report abuse
@4 BR asshole (with shit for brains)
“Everything is going as planned: The complete isolation of the first world. Brazil's Soft Power is irresistible!”

BR asshole, have you noticed that when some supposedly goood news about Brazil hits the news, you gloat about it and grossly exaggerate its positive effects ? and that when bad news about Brazil is posted, you also gloat and try to tell everyone how wonderful things are ? there's only one explanation for that, you must be a schizo psychopath.......
You simply deny the existence of what you don't like, as if by sticking your head in the sand (or up Lula's 'fiofó') will make the problem go away.
15 VoiceOver (#) Feb 11th, 2016 - 12:06 am Report abuse
Brassiere-sileiro must be happy.

10.71% is a much higher inflation than his 81-eyes countries, which must make do with inflations of some miserly 1 or 2%, the poor dears.

People of his 81-eyes countries must face the fact, that they can buy what they used to, while Brassiere-sileiro can get almost 11% less of everything for free.
16 SebaSvtz (#) Feb 11th, 2016 - 01:04 pm Report abuse
Well done populists, well done ...

Keep voting former terrorists Dilma, keep praising corrupt Lula, etc. You are on an unstoppable path to the top ...
17 L0B0MAU (#) Feb 11th, 2016 - 08:31 pm Report abuse
Petrobras’ total debt to total equity ratio jumped from around 115% in 2014 to 174% at the end of September 2015 — making it the most indebted company in the Oil and Gas Industry.

REF: www.bidnessetc.com/61825-is-petroleo-brasileiro-sa-petrobras-brazils-biggest-problem/

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