Brazil mid-month inflation undershoots forecasts ahead of presidential runoff
SPY•Brazil’s IPCA-15 inflation rose 0.32% in the month to mid-October, below the 0.43% forecast, while annual inflation reached 4.62%, below the 4.73% forecast.
1. Inflation data
Brazil’s IPCA-15 consumer price index rose 0.32% in the month to mid-October, down from 0.70% the previous month and below economists’ 0.43% forecast. Prices rose 4.62% over the 12 months through mid-October, up from 4.47% the previous month but below the 4.73% forecast.
2. Price movements
Food and beverage prices rose 0.88% during the month, personal expenses climbed 0.55%, and housing costs fell 0.1%. Brazil’s central bank targets inflation at 3%, plus or minus 1.5 percentage points.
3. Rate outlook
Policymakers are due to meet on November 3-4 after cutting the benchmark rate by 25 basis points to 13.75% last month, their fifth consecutive cut. Economist Andres Abadia said easing core inflation strengthens the case for further cuts, while the presidential runoff and concerns over fiscal credibility remain risks.
