UPDATE 1-Brazil's inflation rises more than expected in mid-April

viernes 17 de abril de 2015 08:33 GYT

(Adds table, details on 12-month rate, market reaction)
    By Silvio Cascione
    BRASILIA, April 17 (Reuters) - Consumer prices in Brazil
rose more than expected in the month to mid-April, reinforcing
expectations of further interest rate increases by the central
bank in coming months.
    The IPCA-15 consumer price index rose 1.07
percent in the month to mid-April, government statistics agency
IBGE said on Friday, topping market expectations for an increase
of 1.00 percent in a Reuters poll.
    In the 12 months through mid-April, consumer prices rose
8.22 percent, up from a rise of 8.14 percent in the
12 months through mid-March and far above the goverment's target
of 4.5 percent.
    Yields on interest rate futures <0#2DIJ:> rose after the
numbers were released, signaling traders added bets on upcoming
interest rate increases. The central bank has raised its
benchmark Selic rate since October to a six-year
high of 12.75 percent in an attempt to lower inflation.
    Higher electricity rates were again the main cause for the
inflation surge, with an increase of 13 percent from mid-March.
    Energy rates and other government-regulated prices have been
rising sharply since President Dilma Rousseff was re-elected in
October. Policymakers have since stopped postponing price hikes
to control inflation and are focusing instead on plugging
Brazil's growing budget deficit.
    Food prices also gained sharply, rising 1.04 percent from
mid-March, although the increase was smaller than the 1.22
percent rate seen in the previous month.
    Despite growing evidence that Brazil's economy is in
recession, the central bank and market economists expect
inflation to subside only next year, when it could drop to an
annual rate of near 5 percent.
    Brazil's stagflation has dragged on consumer and business
confidence and helped send the popularity of President Rousseff
to near record lows.
    The central bank's next rate-setting meeting takes place on
April 28-29.
    Below is the result for each price category:    

                                 April    March
 - Food and beverages             1.04     1.22
 - Housing                        3.66     2.78
 - Household articles             0.68     0.44
 - Apparel                        0.94    -0.11
 - Transport                      0.33     1.91
 - Health and personal care       0.44     0.96
 - Personal expenses              0.57     0.41
 - Education                      0.14     0.74
 - Communication                 -0.30    -0.78
 - IPCA-15                        1.07     1.24


 (Reporting by Silvio Cascione Editing by W Simon)