April 30, 2019 / 1:28 PM / a year ago

UPDATE 1-Brazil producer prices rise 1.63 pct in March

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By Jamie McGeever

BRASILIA, April 30 (Reuters) - Brazilian producer prices rose 1.63 percent in March from the previous month, statistics agency IBGE said on Tuesday, the strongest rise since September, which helped lift the annual rate of factory gate inflation to 8.98 percent.

Of the 24 areas surveyed across Brazilian industry, 19 registered price increases, up from 12 the month before. February’s rate of producer price inflation was revised up slightly to 0.45 percent from 0.43 percent, IBGE said.

The figures suggest wider price pressures across the economy could remain elevated for a while yet, a potential headache for central bankers who had predicted consumer price inflation would peak around April/May before falling back to target later in the year.

On the other hand, the latest unemployment figures released on Wednesday show there is still significant slack across the labor market, which economists say should put downward pressure on inflation.

The biggest monthly increases in producer prices last month were the 12.1 percent rise in mining and oil production and the 6.7 percent rise in oil and alcohol refining, IBGE said. These sectors registered annual inflation rates of 31.1 percent and 19.3 percent, respectively.

Food prices rose 0.7 percent on the month, the first increase this year and reducing the rate of deflation in the sector so far this year to 0.8 percent, IBGE said. Compared with March 2018, food prices were 6.4 percent higher.

So far this year, producer prices have risen 1.32 percent, IBGE said. (Reporting by Jamie McGeever Editing by Chizu Nomiyama and Jonathan Oatis)

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