June 9, 2017 / 12:56 PM / a year ago

UPDATE 1-Brazil's inflation tumbles to lowest in 10 years

 (Adds details, background)
    By Silvio Cascione
    BRASILIA, June 9 (Reuters) - Brazil's annual inflation rate
tumbled more than expected in May to the lowest in 10 years,
data showed on Friday, underscoring bets on new interest rate
cuts and a lower inflation target.
    Consumer prices as measured by the benchmark IPCA index rose
3.60 percent in the 12 months through May, down from an increase
of 4.08 percent in the previous month and below all forecasts in
a Reuters poll, statistics agency IBGE said.
    This is the lowest inflation rate for Brazil since May 2007,
in stark contrast with the double-digit rates seen before a
deep, two-year-long recession weighed on prices.
    On a monthly basis, inflation rose to 0.31
percent in May from April, up from an increase of 0.14 percent
in the previous month, according to IBGE. It was the lowest
monthly rate for May since 2007.
    The official inflation target is 4.5 percent. Most
economists expect the government to reduce that goal later this
month for the first time in more than a decade to bring it
closer to the target of other emerging economies.
    Falling inflation is also expected to leave the central bank
comfortable to cut rates from the current 10.25 percent to
around 8.5 percent by December, according to a weekly survey of
economists. Yields on rate futures were mostly down on Friday.

    The central bank has already lowered the benchmark Selic
rate by 400 basis points since October, but signaled it could
slow down the pace of easing as a political crisis threatened to
derail President Michel Temer's agenda to cut public spending.
    Below is the result for each price category:     
                                May   April
 - Food and beverages         -0.35    0.58
 - Housing                     2.14   -1.09
 - Household articles         -0.23   -0.28
 - Apparel                     0.98    0.48
 - Transport                  -0.42   -0.06
 - Health and personal care    0.62    1.00
 - Personal expenses           0.23    0.09
 - Education                   0.08    0.03
 - Communication               0.09    0.55
 - IPCA                        0.31    0.14
 (Editing by Jeffrey Benkoe)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below