Brazil Inflation Rate Falls to Fresh 1999 Low of 2.46%


Consumer prices in Brazil increased 2.46 percent year-on-year in August of 2017, slowing from a 2.71 percent rise in July and below market expectations of 2.6 percent. The inflation rate eased for the 12th consecutive month to a new low since February of 1999. It is also the lowest rate for an August month since at least 1980 as a record harvest dragged down food prices.

Year-on-year, cost of food and beverages went down 2.01 percent, following a 0.66 percent drop in July. It is the biggest fall since at least 1990. Additional downward pressure came from prices of furnishings and household equipment (-1.63 percent compared to -0.05 percent in July). In addition, cost rose at a slower pace for health (6.78 percent compared to 7.19 percent) and education (7.15 percent compared to 7.94 percent). On the other hand, inflation accelerated for housing (4.88 percent compared to 4.6 percent); transport (3.08 percent compared to 1.8 percent in July) and clothing (2.33 percent compared to 2.2 percent).

On a monthly basis, consumer prices went up 0.19 percent, below a 0.24 percent rise in July and lower than market expectations of 0.31 percent. Prices of food went down 1.07 percent, the fourth consecutive drop amid a record harvest. Main declines were reported for beans (-14.86 percent); tomato (-13.85 percent); sugar (-5.9 percent); milk (-4.26 percent); fruit (-2.57 percent) and meat (-1.75 percent). Additional downward pressure came from cost of communication (-0.56 percent). The biggest upward impact came form transport cost (1.53 percent), mainly due to a 6.67 percent rise in fuels.

Brazil Inflation Rate Falls to Fresh 1999 Low of 2.46%


IBGE | Joana Taborda | joana.taborda@tradingeconomics.com
9/6/2017 1:30:36 PM