Brazil's six-month inflation at 6.17%, highest for half year since 2003

Thursday, July 9th 2015 - 06:46 UTC

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Finance Minister Levy, expects inflation starts to slow down at the end of this year towards the centre of the target in 2016: 4.5% with a maximum of 6.5%.

Brazil's inflation was little changed at 0.79% in June, rising to 8.89% over the last 12, reported the Brazilian Institute of Geography and Statistics, IBGE, on Wednesday. May's rate was 0.74%. Main price rises accounting for a third of June's inflation included 29.19% for plane tickets, 4.95% in water taxes and gambling rates, officials said.

So far in 2015, consumer prices have gone up 6.17%, IBGE said, adding this was the highest rate for the first half of the year since 2003. During the same period last year, inflation reached only 3.75%.

Brazil's government says it wants to keep inflation down to 4.5%, with a maximum of 6.5%. However, the central bank is expecting prices to rise nine percent this year.

The pace of inflation in June this year was atypical. In Brazil prices are historically low in the middle of the year, a period marked by the reduction in food prices. However on this occasion food prices are climbing as rainfall patterns have affected products such as onions and tomatoes.

Prices of the lottery games of Caixa Econômica Federal were adjusted from 40% to 100%, what helped to push inflation up in a quite atypical way.

Midyear prices are high after a run-up in the first quarter: 1.24% (January), 1.22% (February) and 1.32% (March). In the early months of the year, inflation was pushed up especially by electricity rates, and gas prices.

Finance Minister, Joaquim Levy, expects inflation starts to slow down at the end of this year towards the centre of the target in 2016. For that to happen, the Central Bank already raised the basic interest (Selic) to 13.75% per year. It's a way to make credit dearer and discourage consumption.

The Brazilian government has also helped to fight high prices by reducing spending and trying to balance the budget. In the last poll survey conducted by the Central Bank, economists predicted inflation rates of 9.04% in 2015 and 5.45% in 2016.

The world's seventh biggest economy is stagnant and headed for recession after a fall in global commodity prices, political instability and a major corruption scandal paralyzing the country's biggest company, state-owned oil giant Petrobras.

Categories: Economy, Brazil.

Tags: Brazil, Brazilean inflation, Brazilian Institute of Geography and Statistics (IBGE), Joaquim Levy.

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ChrisR
I bet levy is regretting the day he told DumbAss he would take this job.

Still, it's better than their 'brothers in The Dar Country way down south.

40%, who'll give me 50%? It seems the argies have their economy upside down, still, they 'worked' for it so they had better enjoy it.
Jul 09th, 2015 - 11:26 am 0
Garrett Connelly
Yes, this situation is also called “stagflation.” The same friction from the loss of a free lunch faces all corporatistas.

Distributed intelligence of the human spirit is being very patient.
Jul 09th, 2015 - 10:20 pm 0
Jack Bauer
@1 ChrisR
Agree, Levy is sitting on a time-bomb. The PMDB, Dilma's main ally in Congress, has seen the writing on the wall and has decided to distance itself politically from fat D, and in the bargain, unfortunately for Brazil, making life more difficult for Levy. Instead of cutting government expenses, Dilma decided to cut essential investements (mainly in education and public health) in order to reach her proposed primary superavit for 2015 (approx. R$ 70 billion). The payroll for her 39 Ministries - the number of which she is loath to reduce - cost the taxpayer R$ 400 billion per year, and half of that , R$ 200 billion is the salary mass paid to 113,000 commissioned jobs, all appointed by her and the PT , to serve in the Federal Government.........all she would need to do to reach R$ 100 billion in savings is to cut that by half, but she won't do that, because it would mean defunding the PT (to the order of R$ 10 billion per year), which receives 'spontaneous' donations equal to 10% (of the salaries) of these commissioned employess...So she deserves all the shit she is getting.
Jul 12th, 2015 - 07:50 pm 0

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