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Brazil inflation soars as electricity rates go up 22% in March and 60.42% in the last 12 months

Thursday, April 9th 2015 - 01:35 UTC
Full article 19 comments
Housing costs rose 5.29% in March from February alone, pushed up by a 22% increase in electricity rates because of a severe drought affecting hydroelectric production Housing costs rose 5.29% in March from February alone, pushed up by a 22% increase in electricity rates because of a severe drought affecting hydroelectric production
“With the latest increases, the consumer this year is paying on average, 34.34% more for the use of power, while in the last twelve months the bill has gone up 60.42%”, “With the latest increases, the consumer this year is paying on average, 34.34% more for the use of power, while in the last twelve months the bill has gone up 60.42%”,
Central bank president Alexandre Tombini anticipates April inflation will be lower since most increases took place in the first quarter Central bank president Alexandre Tombini anticipates April inflation will be lower since most increases took place in the first quarter

Consumer prices in Brazil picked up in March, putting the 12-month rate at the highest level in more than eleven years, highlighting one of the main challenges facing Latin America's largest economy in the year ahead. The rolling 12-month IPCA was up 8.13% through March, up from 7.70% in February, remaining well above the central bank's 6.5% ceiling. In the first quarter of the year, prices have risen 3.83%, while the 12-month figure marked the highest level since December 2003, when it reached 9.30%.

Brazil's inflation has accelerated mainly due to an increase in electric energy and food prices. President Dilma Rousseff's popularity collapsed as she opted to pass higher costs of electricity, gasoline and other regulated prices on to consumers after years of attempts to keep them low.

Housing costs rose 5.29% in March from February alone, pushed up by a 22% increase in electricity rates as a severe drought affecting hydroelectric production heightened risks of energy rationing. Food prices also accelerated their advance in March to 1.17% from 0.81% in the previous month.

“With the latest increases, the consumer this year is paying on average, 34.34% more for the use of power, while in the last twelve months the bill has gone up 60.42%”, according to the IBGE report.

In congressional testimony in mid-March, central bank President Alexandre Tombini said that the inflation rate in April should be much lower than in the first three months of the year, as prices have risen quickly in the first few months of the year because of an increase in government-set prices, such as electric and gasoline prices, and the weaker real.

The central bank raised its benchmark interest rate half a percentage point, to 12.75%, at its monetary policy in March and it is expected by economists to implement at least one more hike in the next few months.

 

 

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  • yankeeboy

    Who said this would happen a couple years ago..
    Yes it was me

    Business is crashing and the subsidies must be reigned in dramatically.
    They'll be really lucky if they can keep the unrest of the slum dwellers in check while they try to fix their budget.

    Maybe just maybe they should have saved some $ over the last decade rather than wasting it on slum dwellers (crab pot) buying crack. Now they have no money to bridge them through their down cycle.
    Silly Marxists.
    They'll never learn.

    This is only the beginning...

    Apr 09th, 2015 - 12:10 pm 0
  • Brasileiro

    The electricity has risen in price because the generation sources, at present, are largely thermoelectric. And the thermoelectric generate energy at a higher cost. Simple as that.
    When the rainfall return to normality will lower the price again.
    That's what we call planning. Incompetence is what happens in the United States where it is expected shortage of water and electricity by the government was not able to plan or even raise awareness about the plight of reservoirs and natural sources.
    Sand Castles by the sea!

    Apr 09th, 2015 - 01:12 pm 0
  • Conqueror

    @2. Amazing that thermoelectric generation sources account for 20.2% of output. Whilst hydroelectricity accounts for 72.1%.

    http://www.bloomberg.com/news/articles/2014-12-04/forecast-of-brazil-rains-will-halt-expensive-power-plants
    So what we appear to have is heavy rain. Heavy rain means that thermal plants can be shut down. Doesn't heavy rain mean massive hydroelectric capacity? And with thermal plants shut down, a perfect time to raise prices. Sounds like incompetence to me. Depending on area, U.S. increases in electricity costs have ranged between 1.3% and 9.8%.
    http://www.bloomberg.com/news/articles/2014-12-04/forecast-of-brazil-rains-will-halt-expensive-power-plants

    Doesn't that mean that the average U.S. increase is 5.5%? And the Brazilian increase is 22%. I think we can see where the incompetence is, Brasso. Or have you got some more 'funny' figures to tell us about? Or perhaps you'd like to just make some up?

    Apr 09th, 2015 - 01:58 pm 0
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