UPDATE 1-Brazil annual inflation hits 10-year high in February

viernes 6 de marzo de 2015 08:52 GYT

(Adds table, details)
    By Silvio Cascione
    BRASILIA, March 6 (Reuters) - Brazil's annual inflation rate
rose more than expected in February to the highest in nearly 10
years, drifting further away from the central bank's goal
despite aggressive interest rate hikes and sputtering economic
    Consumer prices as measured by the benchmark IPCA index
 rose 7.70 percent in the 12 months through
February, government data showed on Friday. That was the highest
rate since May 2005 and well above the government's 4.5 percent
inflation target.
    On a monthly basis, the IPCA index rose 1.22
percent from January, little changed from an increase of 1.24
percent in the previous month, statistics agency IBGE said, as
rising taxes and school fees kept upward pressure on prices.
    The result, which topped even the most pessimistic of 28
forecasts in a Reuters poll, shows the unpopular shock therapy
of steep interest-rate hikes and budget cuts under President
Dilma Rousseff has yet to take effect on inflation.
    The central bank, which has pledged to do "whatever is
necessary" to lower inflation back to its 4.5 percent target
next year, raised interest rates for a fourth straight time this
week to 12.75 percent. 
    The bank hinted at further rate hikes in coming months even
as job losses mount in what appears to be the worst recession in
a quarter century, according to private estimates.
    Gasoline prices jumped 8.4 percent from January after
Finance Minister Joaquim Levy raised fuel taxes to plug a
growing budget deficit. 
    Education costs also climbed, 5.9 percent, as institutions
raised tuition fees at the start of the school year.
    Food prices slowed their pace of increase in February,
rising 0.81 percent from the previous month. 
    Below is the result for each price category:     
                                 February     January
 - Food and beverages                0.81        1.48
 - Housing                           1.22        2.42
 - Household articles                0.87       -0.28
 - Apparel                          -0.60       -0.69
 - Transport                         2.20        1.83
 - Health and personal care          0.60        0.32
 - Personal expenses                 0.86        1.68
 - Education                         5.88        0.31
 - Communication                    -0.02        0.15
 - IPCA                              1.22        1.24

 (Additional reporting by Rodrigo Viga and Walter Brandimarte in
Rio de Janeiro; Editing by W Simon and Chizu Nomiyama)