BRAZIL: Annual Inflation Decelerates To 2.24%, Lowest Since 1999
The 12-month inflation rate in Brazil decreased to 2.46%, the lowest level since February 1999, when it reached 2.24%. The reading was lower than the 2.60% rate expected by market analysts and is also below the central bank's target for inflation, which ranges from 2.5% to 6.5%.
In a monthly comparison, the Brazilian consumer price index rose 0.19% in August, after a 0.24% increase in July, according to the Brazilian statistics office. Analysts expected a 0.31% growth.
The weak inflation readings reflect a 0.47% decline in food and beverage prices in August compared to July, which offset the 1.53% increase in transport prices after the government's decision to double a tax on fuels. As other groups had small price gains, the inflation rate remained constrained.
Fuel prices, however, rose sharply on a monthly comparison due to higher taxes. Ethanol became 5.71% more expensive in August compared to July, while gasoline prices rose 7.19%.
Year-to-date, Brazil's official inflation is running at 1.62%, the lowest result since the implementation of the Real Plan, in 1994.