Brazil mid-September inflation exceeds forecasts ahead of tight election
SPY•Brazil’s annual inflation rose to 4.47% in mid-September from 4.24% a month earlier, above the 4.30% median forecast. Monthly consumer prices rose 0.70%, also exceeding forecasts.
1. Inflation accelerates
Annual inflation reached 4.47% in mid-September, up from 4.24% a month earlier and above every forecast in a poll of economists. Consumer prices rose 0.70% over the month, reversing a 0.40% decline in mid-August and exceeding the 0.53% median forecast.
2. Housing drives monthly rise
Housing costs rose 2.07% as electricity prices increased, while food and beverage prices rose 0.4%. Annual inflation remained within the central bank’s target range of 3%, plus or minus 1.5 percentage points.
3. Rate and election context
The central bank cut its benchmark Selic rate by 25 basis points last week to 13.75%, citing signs of an economic slowdown, and kept its options open ahead of next month’s election. Inflation has become a central campaign issue as President Luiz Inacio Lula da Silva seeks re-election in a tight race against Senator Flavio Bolsonaro.
