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Brazil's July inflation climbed to 9.56%, powered by electricity bills, up 57.8%

Saturday, August 8th 2015 - 09:20 UTC
Full article 3 comments
Inflation remains well above the central bank's target of 4.5% despite seven consecutive interest rate hikes -- most recently to 14.25%. Inflation remains well above the central bank's target of 4.5% despite seven consecutive interest rate hikes -- most recently to 14.25%.

Brazil's annual inflation rate climbed to 9.56% in July, the highest level since 2003, official data showed Friday. Prices are being driven higher by the rising cost of electricity -- up 57.8% in the past 12 months -- as well as increasingly expensive housing, food and beverages, and health care.

 Inflation remains well above the central bank's target of 4.5% despite seven consecutive interest rate hikes -- most recently to 14.25%.

The latest figure adds to the bad news facing President Dilma Rousseff, who has struggled to kick-start the world's seventh-largest economy, expected to contract by 1.49% this year.

On Thursday Brazil's central bank said it will remain vigilant in case inflation forecasts drift significantly away from its target. In the minutes of last week's rate-setting meeting, the bank said progress in its fight against inflation showed monetary policy was going in the right direction. It has promised to halve inflation next year.

The central bank last week raised its benchmark Selic rate by 50 basis points for the sixth straight time, to 14.25%, but signaled it was halting the aggressive monetary tightening cycle. The bank in the minutes affirmed the tightening pause, saying policymakers need perseverance and determination to lower inflation.

However a shaper depreciation of the Brazilian Real could raise pressure on the bank to hike rates again to keep inflation expectations anchored, analysts said. So far this year, the real has weakened more than 24% against the U.S. dollar.

Categories: Economy, Politics, Brazil.

Top Comments

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  • Skip

    “On Thursday Brazil's central bank said it will remain vigilant in case inflation forecasts drift significantly away from its target.”

    Umm FAIL!

    Aug 08th, 2015 - 02:19 pm 0
  • ChrisR

    I wouldn't worry about 9.56% inflation.

    Given the increased level of interest rates the damage is done already and Mr Market has stopped buying.

    Was that what these pillocks wanted?

    Of course not.

    Aug 08th, 2015 - 08:05 pm 0
  • Jack Bauer

    The good side to all this shit is that a lot of ignorant voters are starting to wake up....thus fat D's falling popularity.....under 8%.

    Aug 08th, 2015 - 11:16 pm 0
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