MercoPress. South Atlantic News Agency

Month to month inflation in Brazil during September was the lowest since 1998

Finance minister Meirelles said the economy is returning to normal but remains to see if the inflation trend will be long lasting

Brazil's inflation continued its slow fall in September in a positive sign for the new government as it wrestles to end the worst recession in nearly a century. The 12 month rate fell to 8.48%, down from 8.97% August hitting its lowest level for the month since 1998.

 For the month, prices rose just 0.08%, far less heated than the 0.44% increase recorded in August. It was the smallest monthly increase since July 2014, when prices rose 0.01% and the lowest increase for a September since 1998.

Food prices, which helped lead the overall rate by shooting up 9.11% between January and August, slipped slightly in September. Transport costs also fell fractionally, while housing rose 0.63%from August and health costs rose 0.33%.

The easing off of price rises will be welcome to regular Brazilians who have been hammered by inflation, rising joblessness and a profound economic slowdown.

President Michel Temer has vowed to take painful austerity measures to return the economy to health. The lower inflation will also boost expectations for the Central Bank to start cutting interesting rates which have been pegged unchanged at 14.25% for the last year.

Lower inflation signals Brazil's economy is returning to normal, but it remains to be seen whether that trend will be long-lasting, Finance Minister Henrique Meirelles said on Friday.