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HomeEconomyBrazilian inflation extends downward trend in mid-September as fuel prices fall

Brazilian inflation extends downward trend in mid-September as fuel prices fall

by Gabriel Araujo

SAO PAULO (Reuters) – Brazil’s consumer prices rose between this month and mid-September as fuel costs continued to rise, Brazil’s government statistics agency IBGE said on Tuesday. downtrend. It fell due to tax cuts and price cuts by state-run oil company Petrobras.

The local IPCA-14 index fell 0.14% this month to mid-September , which was a steeper decline than the 0.2 percent decline expected by analysts polled by Reuters, but slowed from a 0.73 percent decline last month.

Inflation rate reached 7.37 month to mid-September %, well below economists’ forecast of 8.14%, likely supporting the central bank’s recent decision to pause its aggressive rate hike cycle.

and in August, when Latin America’s largest economy posted its lowest mid-month inflation rate in about 30 years, the drop this month was driven by the transport sector, where costs fell by 2.2%. 35%, IB General Electric said.

In addition to the energy state tax cuts announced earlier this year, oil giant Petrobras has cut gasoline prices at refineries twice since mid-August, resulting in lower prices at gas stations.

However, IBGE said the fall in inflation in September was not widespread, as prices fell in only three of the nine categories of products and services surveyed – communications, food and Drinks and transportation.

Apparel, healthcare and home prices rose during the period, the report noted.

Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said the new data is further evidence that inflation is decelerating rapidly, mainly due to the impact of taxes and monetary tightening hysteresis effect.

“Core pressures remain relatively high, mainly due to the resilience of domestic demand, but we expect growth to moderate in the coming months.”

Latest inflation The data comes as Brazil’s central bank announced last week that it will keep interest rates unchanged at .75%, at 14 Suspended aggressive tightening policy after Continuous rate hikes aimed at curbing high inflation.

Most members of the Monetary Policy Committee concluded that inflation expectations support the end of the tightening cycle, although further “residual” rate hikes are “extensively debated,” minutes from Tuesday’s meeting showed.

“(But) the fact that inflation is still very strong (especially outside the food and energy categories) supports our view that the central bank will wait until the middle of next year before turning to rate cuts,” he said. added.



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