Inflation in Brazil ended 2020 at 4,5% the stats agency IBGE revealed on Tuesday, above the central bank's target, with food prices rising, 14,1%, the most in two decades.
It was the second month in a row the benchmark annual IPCA consumer inflation rate has been above 4%, having more than doubled from the record low below 2% in May.
The annual rate of 4.5% in December was up from 4.3% in November, IBGE said higher than the central bank's year-end goal of 4.00%. It was also the highest inflation for a calendar year since 2016, IBGE added.
Food and drink prices rose 14.1% in the year, accounting for more than half of the overall annual increase and the highest since 2002, IBGE said.
The monthly rate of inflation in December was 1.35%, IBGE said, with a 2.9% rise in housing costs accounting for almost half the gains. It was the highest monthly rate since February 2003, and the highest for any December since 2002, IBGE said.
Central bank officials have insisted that the inflation spike in recent months is temporary and will soon pass as the transitory jump in food and commodity prices fades.
But at their last policy meeting in December, the central bank said their forward guidance of keeping borrowing costs at a record low of 2.00% for longer could be removed earlier than previously anticipated.
The central bank's latest weekly 'FOCUS' survey of economists showed they raised their forecasts for the benchmark Selic interest rate to 3.25% at the end of 2021, and 4.75% at the end of 2022.
Regarding annual inflation, the private sector forecasted 3,3% and 3,5% this year and in 2022, while the central bank's official targets are 3.75% and 3.50%, respectively