Brazil inflation tops target range in September, beats forecasts before runoff
EWZ•Brazil’s annual inflation rose to 4.58% in the 12 months through September, above the 4.50% forecast and the central bank’s 4.5% upper target limit. Monthly inflation was 0.82%, exceeding the 0.73% forecast.
1. Inflation accelerates
Brazil’s IPCA consumer price index rose 4.58% in the 12 months through September, up from 4.22% in August, statistics agency IBGE said. The monthly increase was 0.82%. All nine surveyed groups posted gains, while food and beverage prices rose 0.83% after three monthly declines.
2. Rate outlook and election
Pantheon Macroeconomics’ Chief Latin America Economist Andres Abadia said the rebound in food prices and a weaker currency argue against accelerating interest-rate cuts; further declines in services and core inflation would be needed for faster easing. The central bank cut its benchmark rate for a fifth straight meeting in September, to 13.75%, and is scheduled to meet November 3-4, after Brazil’s presidential runoff election.
