UPDATE 1-Brazil inflation rises above market expectations in July

miércoles 10 de agosto de 2016 08:33 GYT
 

(Adds forecasts and context)
    BRASILIA, Aug 10 (Reuters) - Inflation in Brazil rose more
sharply in July than economists expected, official data showed
on Wednesday, raising pressure on the central bank to keep
interest rates on hold for some time.   
    Consumer prices as measured by the benchmark IPCA index
, rose 0.52 percent last month, above the 0.45
percent median forecast in a Reuters poll of economists.
    Prices rose 8.74 percent in the 12 months through July,
slowing from a one-year increase of 8.84 percent in June but
above market expectations of 8.66 percent.
    Higher-than-expected inflation this year has forced the
central bank to keep its benchmark Selic rate near 10-year highs
even as the country struggles with a crippling recession that is
now in its second year.
    High interest rates and growing expectations that austerity
measures under interim President Michel Temer will be approved
have recently curbed inflation expectations for this year and
next. Less government spending and more-expensive credit lead to
lower consumption, which reduces inflationary pressures.
    Below are the inflation rates for each price category: 
                              July         June      
- Food and beverages          1.32         0.71     
- Housing                    -0.29         0.63      
- Household articles          0.53         0.26     
- Apparel                    -0.38         0.32     
- Transport                   0.40        -0.53     
- Health and personal care    0.61         0.83     
- Personal expenses           0.70         0.35     
- Education                   0.04         0.11     
- Communication               0.02         0.04     
- IPCA                        0.52         0.35     

 (Reporting by Alonso Soto; Editing by Lisa Von Ahn)