Monthly inflation in Brazil slowed in January as a sharp fall in electricity prices dragged down housing costs, but the annual rate of inflation remained high and significantly above the central bank’s year-end goal, Trend reports citing Reuters.
It was the third month in a row the benchmark annual IPCA consumer inflation rate has been above 4%, having more than doubled from the record low below 2% last May.
The annual rate of 4.56% in January was slightly below the 4.61% median forecast in a Reuters poll of economists, but the highest for any January since 2017, statistics agency IBGE said.
The central bank’s year-end goal is 3.75%, with a 1.5 percentage point margin of error on either side.
This softened the impact of another strong rise in food and drink prices, which rose 1% on the month, IBGE said.
Inflationary pressures remain strong. Annual factory gate inflation ended last year at 19.4%, the highest level since the series began in 2014.
A central bank weekly survey of economists on Monday showed the 2021 inflation outlook rising to 3.60%, the fifth rise in a row and the highest in almost a year.
Economists at Barclays raised their 2021 forecast to 3.9% from 3.6%, still with upside risks, and brought forward their first interest rate hike forecast to March from May.