In the 12 months through February, inflation rose to 6.31 percent, the highest value in more than a year. Education and food and beverages recorded the largest price increases, 5.4 and 1.45 respectively.

At this pace, inflation has already passed the official target of 4.5 percent and is rapidly approaching the tolerance margin of plus 2 percentage points.

Moreover, this rise in inflation may put pressure on the Central Bank of Brazil to increase interest rate which may threaten Brazilian government plans to reignite a near-stagnant economy. Indeed on March 6th the Central Bank decided to maintain its key policy interest rate unchanged at 7.25, despite the timid growth rate of just 0.6 percent, quarter on quarter, registered in the last three months of 2012.
On a month over month basis, the IPCA increased 0.6 percent and was below the 0.86 percent registered in January, mainly due to a decline of 15.2% in electricity expenses. 


Duarte Ricardo |
3/8/2013 1:18:18 PM