August 8, 2018 / 12:59 PM / 8 months ago

UPDATE 1-Brazil July inflation slows as impact of truckers' strike fades

 (Recasts to add details, context)
    By Bruno Federowski
    BRASILIA, Aug 8 (Reuters) - Inflation in Brazil slowed for
the first time in two months in July as the impact of a May
nationwide truckers' strike dimmed, reinforcing the view that a
recent price spike would not last long.
    Consumer prices tracked by the benchmark IPCA index rose
4.48 percent in the 12 months through July, government
statistics agency IBGE said on Wednesday, slightly above the
median 4.40 percent forecast of economists in a Reuters poll.
    That is a bit slower than the 4.53 percent rate seen in
mid-July, suggesting a sharp acceleration in inflation from less
than 3 percent earlier this year may have come to an end. 
    Truckers protesting high diesel prices blocked major
highways in the final weeks of May, forcing farmers to cull
their flocks and dump milk, and driving widespread product
    But food prices, the category most affected by the strike,
fell 0.12 percent in July as supplies normalized around the
    Consumer prices as a whole rose 0.33 percent from a month
earlier, compared to a 1.26 percent increase in June and a tad
more than the 0.27 percent consensus in the Reuters poll.
    Higher power rates after scarce rains dampened hydropower
generation, however, and prevented an even steeper deceleration.
    The reading highlights how a weaker-than-expected recovery
in the economy, which took a further hit from the late-May
protests, is curbing the outlook for inflation and allowing the
central bank to keep rates low for a long time.
    The bank last week kept the benchmark Selic rate at a record
6.50 percent for a third straight policy-setting meeting, and
suggested there would be no rate hikes in the immediate future
as inflation expectations remained under control.
Below is the result for each price category: 
                              July         June      
- Food and beverages         -0.12         2.03     
- Housing                     1.54         2.48      
- Household articles          0.47         0.34     
- Apparel                    -0.60        -0.16     
- Transport                   0.49         1.58     
- Health and personal care    0.07         0.37     
- Personal expenses           0.31         0.33     
- Education                  -0.08         0.02     
- Communication               0.08         0.00     
- IPCA                        0.33         1.26     

 (Reporting by Bruno Federowski; Editing by Bernadette Baum)
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