Retail prices in Brazil, as measured by the benchmark IPCA index, rose 0.8% in February, down from 0.83% January, the national statistics agency said in a report distributed in Rio de Janeiro Friday.
Unexpectedly food prices increased 0.23% in February, compared with a 1.16% in the previous month and transportation prices rose 0.46%, down from 1.55% in January.
Education prices, which jumped 5.81%, accounted for more than half of the price increase.
The Brazilian government said earlier this week it will slash subsidies, education and defence spending as part of a plan to reduce this year’s budget by 50.1 billion Real (30.4 billion USD). In December, the central bank increased capital and reserve requirements to slow credit growth and inflation.
“We won’t allow inflation by any means to get out of control,” President Dilma Rousseff told reporters in Brasilia on Thursday.
Latin America’s largest economy expanded 7.5% in 2010, its fastest pace in more than two decades, after registering year-on-year growth of more than 9% in the first and second quarters.
Economists covering the Brazilian economy expect growth to slow to 4.3% this year, according to a central bank survey of about 100 economists published Feb. 28. The same survey shows economists forecast consumer prices will increase 5.8% this year and 4.78% in 2012. GDP rose 5% in the fourth quarter from a year earlier, the slowest pace in a year
President Rousseff has stated on several occasions that Brazil will seek “reasonable” “sustainable” economic growth of 4.5% to 5% a year.
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