Brazil's Inflation Rises on Transport and Food Costs

Brazil's annual inflation rate rose to 4.14% in March 2026, up from 3.81% in February and slightly above market forecasts of 4.0%. Price pressures intensified in food and beverages (2.16% vs. 1.76%) and transport (3.69% vs. 2.49%), with the latter driven by a sharp rise in vehicle fuel costs (4.32% vs. 0.32%) amid the oil and gas supply crisis stemming from the Middle East conflict and the closure of the Strait of Hormuz. Inflation eased modestly in other categories, such as clothing (4.90% vs. 5.04%). On a monthly basis, the CPI rose 0.88%, following a 0.70% gain in February.

The annual inflation rate in Brazil slowed to 3.81% in February 2026, the lowest since April 2024, down from 4.44% in January and compared to forecasts of 3.77%. The slowdown was mainly driven by softer price increases for food and beverages (1.8% vs. 2.2% in January) and housing (5.7% vs. 10.0%), particularly electricity prices, which rose 9.4% compared with 27.3% in the previous month due to base effects. In contrast, price pressures strengthened for transportation (2.5% vs. 2.4%), health care (5.7% vs. 5.6%), personal expenses (6% vs. 5.8%), and education (6.5% vs. 6%). Compared with the previous month, the CPI rose 0.7%, marking the largest monthly increase in a year. The main upward pressure came from education (5.21%) and transportation (0.74%). Within education, regular courses increased 6.2%, reflecting the price adjustments typically applied at the start of the academic year. In transportation, airfares surged 11.4%.

Brazil’s CPI rose 4.44% year-on-year in January 2026, up from 4.26% in December and broadly in line with market expectations of 4.43%. Price pressures were strongest in housing (10.06%), education (5.97%), personal expenses (5.76%), healthcare (5.59%), and clothing (4.88%). Meanwhile, the mildest inflation rates were recorded in household articles (0.01%), communication (1.78%), food and beverages (2.20%), and transport (2.36%). On a monthly basis, consumer prices increased 0.33% in January, the same as in December and compared to forecasts of 0.32%. The largest upward pressure came from transport prices, which rose 0.6%, driven mainly by increases in gasoline prices (2.06%) and city bus fares (5.14%). Communication prices also climbed sharply, rising 0.82%, led by higher telephone prices (2.61%).