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Brazil's March inflation marks the steepest increase for the month since 2003

Thursday, April 10th 2014 - 06:28 UTC
Full article 14 comments
Food and fuel were some of the items with the most influence Food and fuel were some of the items with the most influence

Brazil’s rate of inflation in March picked up at the quickest pace in 11 years for that month, challenging the central bank’s plan to stop raising interest rates soon and complicating President Dilma Rousseff chances of re-election.

 The benchmark IPCA consumer price index jumped 0.92% in March from February, the steepest increase for the month since 2003, statistics agency IBGE said on Wednesday.

In the 12 months through March, consumer prices rose 6.15%, inching closer to the central bank’s target ceiling of 6.5%. Food prices increased 1.92% from February as irregular rainfall in southern Brazil early this year hurt crops. Prices of basic staples such as tomatoes, potatoes and beans spiked more than 10% in March.

Fuel costs also rose sharply, with ethanol bio-fuel jumping 4.07% from February.

Brazil’s inflation is quickening right when the central bank has signalled it may end a year-long campaign of interest rate increases. The bank raised its benchmark Selic rate for a ninth straight time last week to 11%, and said it will monitor the economic situation to decide whether to raise rates again next month.

The IBGE numbers continued to show widespread price pressures. Services prices rose 9.09% on an annual basis, up from 8.18% in the prior month as salaries continue to increase on a tight labour market.

And the so-called diffusion index, a measure of the proportion of goods and services with price increases in the month, rose to 71% in March from 64.3 in February, according to calculations by Sao Paulo-based Banco Fator.

Stubbornly high inflation was one of the main reasons for a recent drop in Rousseff’s approval ratings.

While she still maintains a comfortable lead in polls on the October election, a recent survey showed more Brazilians want a change in government policies, and twice as many Brazilians think Rousseff’s predecessor and mentor, Lula da Silva, is more qualified than her to carry out changes.

Categories: Economy, Politics, Brazil.

Top Comments

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  • ChrisR

    Mantega controlling the market is going well I see.

    These financial children in charge of the economy need to grow up quickly before the cot sets on fire.

    First world country? Ha, ha, ha.

    Apr 10th, 2014 - 02:52 pm 0
  • Jack Bauer

    “The benchmark IPCA consumer price index jumped 0.92% in March from February, the steepest increase for the month since 2003, statistics agency IBGE said on Wednesday”.
    Given the drought, one might feel inclined to give them a slight discount, but the inflation hiccup is not restricted to 2014....it's been in the making for several years...this 0.92% made headlines becos it's the highest for March , in the last 11 years......11 years ? the exact number of years the PT has been in power ; a coincidence ? Don't think so....Mr. Mantega is in for more unpleasant surprises....wait till prices skyrocket during the World Cup...

    Apr 10th, 2014 - 03:44 pm 0
  • ChrisR

    @ 2 Jack Bauer
    “Mr. Mantega is in for more unpleasant surprises....wait till prices skyrocket during the World Cup.”

    Spot on!

    Apr 10th, 2014 - 07:48 pm 0
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