UPDATE 1-Brazil inflation reaches 12-year high in mid-January

viernes 22 de enero de 2016 08:18 GYT

(Adds table, food price data, background)
    By Silvio Cascione
    BRASILIA, Jan 22 (Reuters) - Rising food prices and bus
fares pushed Brazil's annual inflation rate to a 12-year high in
mid-January, despite a severe recession which has cost more than
1.5 million jobs. 
    Consumer prices as measured by the IPCA-15 index
 rose 10.74 percent in the 12 months through
mid-January, up from 10.71 percent to mid-December and in line
with market expectations, government data showed on Friday.
    Brazil is set to have both the worst recession and the
third-highest inflation rate among G20 economies in 2016,
according to Reuters Polls. The government, whose popularity has
sunk to near record lows, has sent erratic signals about
economic policy, stoking market volatility. 
    On a monthly basis, prices rose 0.92 percent to mid-January,
down from 1.18 to mid-December.
    Food prices jumped 2 percent in the month to mid-January as
a strong El Nino sent heavy rainfall to many southern Brazilian
states, raising the cost of carrots, tomatoes and onions by more
than 15 percent.
    Bus fares also rose in many cities, including Sao Paulo and
Olympic host Rio de Janeiro. The increase has fueled violent
street protests, although in a smaller scale than in 2013.
    Adding to the unease, Brazil's economy shed a net 1.54
million payroll jobs in 2015, the Labor Ministry said on
    Brazil's inflation soared last year after President Dilma
Rousseff increased taxes, energy fares and fuel prices to avert
a budget crisis and prop up embattled state-controlled oil
producer Petrobras.
    Most Brazilians have endured bouts of hyperinflation until
the creation of the real currency in 1994. Although the current
spike is not nearly as severe as previous episodes of runaway
inflation, it has helped erode the popularity of Rousseff
struggling with a corruption scandal involving lawmakers from
her Workers' Party and allied parties.  
    Price rises are expected to slow this year to near 7
percent, but many economists have warned about the risk of
persistent pressures following a controversial central bank
decision on Wednesday to hold interest rates steady. 
    Inflation, which has consistently overshot expectations in
recent years, is targeted at 4.5 percent by the government.
                               mid-Jan     mid-Dec
 - Food and beverages          1.67        2.02
 - Housing                     0.57        0.69
 - Household articles          0.48        0.60
 - Apparel                     0.49        0.73
 - Transport                   0.87        1.76
 - Health and personal care    0.66        0.61
 - Personal expenses           1.00        0.56
 - Education                   0.28        0.32
 - Communication               0.11        0.87
 - IPCA-15                     0.92        1.18
 (Reporting by Silvio Cascione Editing by W Simon)