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Brazil's July inflation surprises and slows to 0.01%, and 6.5% in twelve months

Monday, August 11th 2014 - 08:06 UTC
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Lower airfares, food and fuel prices helped lower inflation, says IBGE Lower airfares, food and fuel prices helped lower inflation, says IBGE

Brazil's Broad Consumer Price Index (IPCA) ended July at 0.01%, the Brazilian Geography and Statistics Institute (IBGE) reported. This figure reflects a decrease compared to June (0.4%) with transport and personal expenses items, contributing for the reduction.

 With the latest inflation reading for July (0.01%), the twelve months rates has slid to 6.5%, at the government's inflation target ceiling. Target inflation for 2014 is 4.5% with a plus tolerance of two percentage points.

In June, inflation had exceeded the ceiling for the annualized rate, reaching 6.52% for the past 12 months.

In the first seven months of 2014, IPCA reached 3.76%, up from 3.18% in the same period of 2013.

The numbers suggested the central bank's yearlong series of increases in interest rates, which ended in April at 11% might have started to curb rising prices.

High prices have also dented business and consumer confidence, contributing to a sharp economic slowdown that some economists say may lead to a recession this year.

Lower airfares, food and fuel prices contributed the most to tamping down July's inflation, according to IBGE.

Airfares plunged 27% after the soccer World Cup, while food prices fell 0.15%, the fourth straight month of decline. Gasoline prices declined 0.80%.

Categories: Economy, Brazil.

Top Comments

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  • ChrisR

    Are these people for real?

    Do they expect us to believe thay can record ANY figure to an accuracy of 0.01%?

    To put that in perspective for Brasso, that's one one-hundreth of ONE percent.

    Piss off and get real.

    Aug 11th, 2014 - 09:31 pm 0
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