Brazil Annual Inflation Dives Below Floor of Target Range

Mario Sergio Lima

(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Pocket Cast or iTunes.

Brazil’s annual inflation fell below the floor of the central bank’s target range in mid-October, giving policy makers more leeway to press ahead with borrowing cost cuts.

Twelve-month inflation eased to 2.72%, the lowest since mid-May 2018 and below the 2.75% floor of the central bank’s target range this year, the national statistics agency reported on Tuesday. The IPCA-15 index rose 0.09% from mid-September, above the 0.03% median estimate from economists in a Bloomberg survey.

Key Insights

Food and beverage costs fell 0.25% in the third straight monthly decline that represented the most significant drag on the indexThe central bank had indicated that annual inflation will slide below 3% before picking up slightly at the end of the yearPolicy makers are expected to cut the benchmark interest rate by a half-point at its third straight meeting this month as consumer price expectations remain below target through 2021

Get More

Three of 10 categories recorded consumer price drops from mid-September, according to the statistics agencyTransportation prices rose 0.35% on the month as gasoline costs increased by 0.76%Housing costs declined by 0.23%

To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, ;Walter Brandimarte at wbrandimarte@bloomberg.net, Matthew Malinowski

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.