UPDATE 1-World Cup puts Brazil inflation near target ceiling
(Adds table, details on World Cup and airfares) By Silvio Cascione BRASILIA, June 18 (Reuters) - Brazil's inflation rate rose more than expected in the month to mid-June and approached the ceiling of the government's target as the World Cup pushed up demand for air tickets. Consumer prices rose 6.41 percent in the 12-month period through mid-June, up from the 6.31 percent rate registered one month before and slightly below the 6.5 percent ceiling of the official target range, statistics agency IBGE said on Wednesday. The median forecast of economists was for a 6.35 percent inflation rate, according to a Reuters poll. The IPCA-15 index rose 0.47 percent from mid-May, down from an increase of 0.58 percent in the prior month. Airfares soared 22.15 percent as hundreds of thousands of soccer fans traveled across the continent-sized country to watch World Cup matches, IBGE said. Demand for air travel had been weaker than expected up to the previous month, but the mid-June numbers suggested the Cup was finally affecting consumer prices. Hotel fares and prices of tourism trips also rose by 4.12 and 5.3 percent respectively, IBGE said. Food prices continued to slow down after a sharp increase earlier this year, though. Food and beverage prices rose just 0.21 percent from the previous month, compared to an increase of 0.88 percent in mid-May. Stubbornly elevated inflation has proved a headache for President Dilma Rousseff, who will seek re-election in October. It has also undermined business and consumer confidence, curbing investments and family consumption over the past few months. Economists expect inflation to breach the target ceiling in coming months. Still, the central bank has signaled that interest rates could stay on hold through the rest of the year after it had raised them nine straight times as it waits to see how the tightening affects prices and slowing economic growth. Brazil's benchmark Selic rate is currently at 11 percent. Below is the result for each price category: June May - Food and beverages 0.21 0.88 - Housing 0.29 1.19 - Household articles 1.00 0.29 - Apparel 0.67 0.67 - Transport 0.50 -0.33 - Health and personal care 0.67 1.20 - Personal expenses 1.09 0.51 - Education 0.13 0.08 - Communication 0.00 0.17 - IPCA-15 0.47 0.58 (Reporting by Silvio Cascione; Editing by Sofina Mirza-Reid)
© Thomson Reuters 2016 All rights reserved.