Consumer prices in Brazil increased 1.06% from March, the fastest rise for the month of April since 1996, the Brazilian Institute of Geography and Statistics, or IBGE, said on Wednesday. Prices rose 12.13% from a year earlier, the fastest pace since 2003. In March, prices rose 1.62% from February and increased 11.30% from a year earlier. Again food and transport had a decisive impulse.
Brazil's central bank has been raising the cost of borrowing since early last year in an attempt to slow consumer price increases. The bank raised its benchmark Selic interest rate by 1 percentage point to 12.75% at its policy meeting last week and said it expects to raise it again at its next meeting, in June, but by a smaller amount.
A problem the central bank faces is that the main sources of inflationary pressure, fuel and commodities prices, are abroad and are mostly outside the influence of monetary policy in Brazil. Oil giant Petrobras, earlier this week raised the price of diesel fuel by 9%, adding pressure for May's inflation report.
Food prices increased 2.06% in April, after rising 2.42% in March, while transportation prices, including fuel, rose 1.91% last month following an increase of 3.02% in March.
Inflation, plus food and fuel prices are having a crucial role this year in Brazil, since next October presidential elections are scheduled with president Jair Bolsonaro bidding for reelection while opposition candidate, ex president Lula da Silva is leading in opinion polls.