Brazil Mid-month Inflation Accelerates in July

Consumer prices in Brazil rose 0.44% month-over-month in the first half of March 2026, above the 0.29% forecast but easing from February's 0.84%. All nine product and service groups posted gains. Food and beverages led at 0.88%, followed by personal expenses at 0.82%. Housing rose 0.24% and transportation 0.21%, while other groups ranged from 0.03% (communications) to 0.47% (clothing). Meanwhile, fuel prices fell 0.03% overall, driven by declines in vehicle gas (-2.27%), ethanol (-0.61%), and gasoline (-0.08%), whereas diesel increased by 3.77%. The government of Brazil has cut taxes and introduced subsidies for diesel, and Petrobras currently has wholesale diesel prices below international parity. By region, Recife (0.82%) and Belém (0.68%) posted the highest rates. São Paulo saw 0.52% inflation and Rio de Janeiro 0.46%. Year-over-year, prices rose 3.90%, down from 4.10% in the prior 12-month period and below the central bank's 4.5% upper threshold, the lowest since May 2024.

Consumer price in Brazil rose by 0.84% in the first half of February from the corresponding period of the previous month, well above the market expectations of 0.6% to pick up from the 0.20% increase in the earlier period, marking the sharpest increase in one year. Prices soared for transportation (1.72% vs -0.13% in mid-January) amid a 5.39% surge in public transportation fares and a 1.38% increase in fuel prices. Prices also accelerated sharply in education (5.20% vs 0.05% in mid-January). In the meantime, consumer price increase displayed more habitual patterns for food and beverages (0.20% vs 0.31%) and housing and utilities (0.06% vs -0.26%). From the previous year, consumer prices rose by 4.1%, remaining below the Brazilian central bank's upper threshold of 4.5% to mark the lowest since June 2024.

Brazil’s mid-month consumer prices rose by 0.20% in the first half of January 2026, almost in line with analysts' estimates of a 0.21%, slightly below December’s 0.25% increase. Health and personal care (+0.81%) had the largest impact and variation among the seven categories that recorded price growth. Other significant contributors included communication (+0.73%) and household items (+0.43%). Food and beverages, the heaviest-weighted group in the index, accelerated from 0.13% in December to 0.31% in January. Conversely, prices decreased for housing (-0.26%) and transportation (-0.13%). On a year-on-year basis, mid-month inflation accelerated to 4.50% from 4.41% previously, compared to forecasts of 4.51%.