UPDATE 1-Brazil inflation slows, posts smallest monthly gain in over a year

jueves 10 de septiembre de 2015 09:02 GYT

(Adds background, data on food, airfares, electricity)
    By Silvio Cascione
    BRASILIA, Sept 10 (Reuters) - Brazil's inflation slowed in
August as food prices and airfares dropped, giving President
Dilma Rousseff and the central bank some respite after a
dramatic increase earlier this year.
    Consumer prices in Brazil rose 9.53 percent in the 12 months
through August, down from an increase of 9.56 percent in July in
the first such drop this year, statistics agency IBGE said.
    On a monthly basis, the benchmark IPCA consumer price index
 slowed to an increase of 0.22 percent in August from
July, its smallest advance in 13 months and far less than the
previous month's 0.62 percent jump.
    Annual inflation remains close to a 12-year high and is more
than twice as high as the official target of 4.5 percent.
    However, price rises are expected to slow down over the next
year after the central bank raised interest rates to a
nine-year-high of 14.25 percent and the economy slipped into
    Inflation was driven down in August by a sharp, seasonal
drop in prices of perishable foods such as tomatoes and onions.
Airfares also fell remarkably, 25 percent from July, as rising
unemployment reduces demand for flights.
    Electricity rates dropped for the first time since March
2014, falling 0.42 percent from July.
    The decline underscored the view that the bulk of the
increases in government-regulated prices this year is already
over,as Rousseff scrambles to plug a growing budget deficit that
cost Brazil its investment-grade rating by Standard & Poor's.
    Brazil's inflation has slowed despite a dramatic currency
drop in recent months to near record lows. 
    While the weaker exchange rate has not yet notably
translated into higher consumer prices, it may compel the
central bank to raise interest rates in the future if it affects
inflation expectations, the bank said in the minutes of its
latest rate-setting meeting.
    Below is the result for each price category:     
                                   August        July
 - Food and beverages               -0.01        0.65
 - Housing                           0.29        1.52
 - Household articles                0.37        0.86
 - Apparel                           0.20       -0.31
 - Transport                        -0.27        0.15
 - Health and personal care          0.62        0.84
 - Personal expenses                 0.75        0.61
 - Education                         0.82        0.00
 - Communication                     0.14        0.30
 - IPCA                              0.22        0.62
 (Reporting by Silvio Cascione Editing by W Simon)