22 de mayo de 2015 / 12:48 / en 3 años

UPDATE 2-Brazil's annual inflation remains at 11-year high in mid-May

(Adds details on services prices, comments)
    By Silvio Cascione
    SAO PAULO, May 22 (Reuters) - Brazil's annual inflation rate
remained at an 11-year high in mid-May despite a smaller
increase in electricity rates and services prices, keeping
pressure on the central bank to continue raising interest rates
even as the economy is seen slipping toward a recession.
    Consumer prices as measured by the IPCA-15 
index rose 8.24 percent in the 12 months through mid-May,
statistics agency IBGE said on Friday, up from 8.22 percent in
mid-April and far above the government's target of 4.5 percent.
    On a monthly basis, consumer prices rose 0.60
percent, down from an increase of 1.07 percent in the previous
month and in line with expectations.
    Electricity rates rose 1.4 percent month-to-month in
mid-May, a much slower pace than the 13.0 percent increase in
mid-April. Energy rates and other government-regulated prices
climbed earlier this year as President Dilma Rousseff cut back
on subsidies and raised taxes to plug a growing budget deficit.
    Prices of services rose 0.15 percent, down from 0.85 percent
in April. The sharp slowdown stemmed mainly from a steep drop in
airfares, which are prone to sharp swings.
    The mid-May inflation numbers add to signs that, while the
worst of Brazil's recent inflation bout has probably passed, it
will take a long time to reach the 4.5 percent target.
    Economists expect Brazil's annual inflation to remain above
8 percent through early 2016 and then gradually descend toward
5.5 percent by the end of next year. The central bank, intent on
lowering inflation expectations even further, is expected to
raise its benchmark interest rate in early June from the current
13.25 percent, one of the highest in the world.
    "We do not believe that today's low services inflation print
would be enough to assure Copom (central bank) members that the
deterioration of the labor market is already alleviating the
inflation outlook," Barclays economist Bruno Rovai wrote on
    High inflation has dented consumer confidence and business
investments, pushing Brazil into what is likely to be its worst
recession in 25 years, according to market forecasts. Economists
say the recent rate hikes aimed at curbing inflation have dealt
a strong blow to economic activity, driving up unemployment in
recent months.
    Below are month-to-month results for each price category:   

                                      May       April
 - Food and beverages                1.05        1.04
 - Housing                           0.85        3.66
 - Household articles                0.41        0.68
 - Apparel                           0.80        0.94
 - Transport                        -0.45        0.33
 - Health and personal care          1.79        0.44
 - Personal expenses                 0.18        0.57
 - Education                         0.09        0.14
 - Communication                     0.22       -0.30
 - IPCA-15                           0.60        1.07

 For the IBGE report, see: bit.ly/1HmyX4A 

 (Reporting by Silvio Cascione Editing by W Simon and Lisa Von

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