MercoPress. South Atlantic News Agency

Brazil February consumer prices rose 0.43%, and 3.89% in twelve months

The central bank expects average inflation this year of 4.25%, and has held its key Selic interest rate at a record low of 6.50% for almost a year.

Consumer prices in Brazil rose at a slightly faster pace than expected in February due to a rise in private education fees and food and beverage prices, statistics agency IBGE said on Tuesday. On a monthly basis, inflation rose by 0.43% in February, IBGE said, more than the expected 0.39% and up from 0.32% a month earlier.

Annual consumer price inflation rose by 3.89%, up from 3.78% in January. The biggest increase was in education costs and tuition fees, which rose by 3.53% on the month, IBGE said. Food and beverages also contributed to inflation, going up by 0.78% last month and 0.90% in January.

The central bank expects average inflation this year of 4.25%, and has held its key Selic interest rate at a record low of 6.50% for almost a year.

While recent policy meeting minutes and statements show that rate-setters think inflation risks are moderating, they still believe upside risks are “significant.” The balance of risks in the coming months, therefore, remains “asymmetric” to rising prices, they warn.

February January - Food and beverages 0.78/ 0.90 - Housing 0.38/ 0.24 - Household articles 0.20/ 0.32 - Apparel -0.33/ -1.15 - Transport -0.34/ 0.02 - Health and personal care 0.49/ 0.26 - Personal expenses 0.18/ 0.61 - Education 3.53/ 0.12 - Communication 0.00/ 0.04 - IPCA 0.43/ 0.32

New central bank chief Roberto Campos Neto has indicated that monetary policy under his aegis will not deviate from that of his predecessor, Ilan Goldfajn. At his Senate confirmation hearing last month he even repeated the bank’s recent mantra that rate decisions will be based on “caution, serenity and perseverance.”