Brazil inflation gains steam in mid-April

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Brazil inflation gains steam in mid-April
(BDCi) – Inflation in Brazil rose slightly more than expected in the month to mid-April, breaking with an easing trend that allowed the central bank to focus stimulating growth by cutting interest rates to near record lows.

Brazil’s benchmark IPCA-15 consumer price index rose 0.43 percent in the month to mid-April, accelerating from 0.25 percent increase in the month to mid-March, the government statistics agency IBGE said on Tuesday.

The index had been expected to gain 0.37 percent in the month to mid-April, according to the median forecast of 21 economists surveyed by Reuters.

In the 12 months to mid-April, prices rose 5.25 percent, below the 5.61 percent increase to mid-March, but nearly stable from the 5.24 percent gain to the end of March.

As the annual inflation rate has eased from a seven-year high of 6.5 percent in 2011, the central bank has shifted its priority from curbing inflation to stimulating the economy, which nearly fell into recession in the second half of 2011.

The bank slashed its benchmark interest rate to 9 percent last week, just above an all-time low and gave hints that more cuts will come.

The leading driver of inflation in the month to mid-April were tobacco prices, IBGE said, after the government unveiled plans to increase taxes on cigarettes by May.

For details of the IBGE report in Portuguese, please see here.

By: Natania Levine
Courtesy: reuters.com
Photo: reuters.com
24 April 2012
9:33 a.m P.D.T

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