MercoPress. South Atlantic News Agency

Brazilian inflation eases in July helped by lower food prices

The Consumer Prices Index in Brazil slowed down to 0.53% in July from 0.74% the previous month, according to a release from the Brazilian Geography and Statistics Institute, IBGE.

The percentage was in the range anticipated by economists which are consulted on a weekly basis by the Brazilian Central Bank. In July 2007, the CPI index was 0.24%. In June food and beverage prices had the largest incidence on the monthly index but the item de-accelerated considerably from 2.11% to 1.05% in July. In the first seven months of this year the CPI reached 4.19% which is almost double the 2.32% of the same period in 2007. Annual inflation to July reached 6.37%, up from the last twelve months to June 6.06%, which still is in the higher bracket of this year's Central Bank target of 4.5%, plus/minus two percentage points. However most private financial institutions from Brazil forecast annual inflation will be above 6.5%. The Brazilian keeping to its orthodox approach against inflation tighten credit policy this year by 175 points taking the reference Selic rate to 13%.