Brazilian inflation rose more than expected in February, official figures showed on Wednesday, although the monthly increase was still the lowest for any February in 20 years.
The central bank is expected to cut interest rates next week to shield the economy from the hit to growth from coronavirus, even though, with the exchange rate already at a record low, this could risk fueling inflation.
Wednesday’s IPCA consumer price data suggests inflation isn’t about to take off any time soon, though the monthly and annual increases were stronger than forecast due to a strong rise in education costs.
Monthly inflation rose to 0.25% in February from 0.21% in January, more than the 0.15% economists expected. But that was still the lowest rate for any February since the 0.13% posted in 2000, IBGE said.
Prices rose 4.01% in the 12 months through February, meeting the central bank’s year-end target of 4.0%, up more than the median forecast of 3.90%.
Of the nine products and services groups surveyed, five increased in February. The standout was education, which saw a 3.7% surge in prices last month, contributing 0.23 percentage points to the overall monthly inflation rise, IBGE said.
Meat prices continued to fall back having surged late last year, declining 3.53% in February after slumping 4.03% in January, IBGE said. Overall, food and drink prices edged up 0.11% last month.