Brazil Producer Inflation Hits 2-Year High

Brazil's producer prices rose 2.63% in April 2026 from the previous month, accelerating from a 2.28% increase in March and marking the sharpest monthly rise since March 2022. Prices increased in 21 of the 24 industrial activities surveyed. Chemical products posted the largest increase, surging 9.91% amid disruptions to petrochemical supply chains and higher naphtha prices linked to Middle East tensions. Rubber and plastic products rose 7.31%, reflecting higher costs for petrochemical inputs, while prices in oil refining and biofuels climbed 6.44% on higher diesel and ethanol prices amid concerns over the Strait of Hormuz. Extractive industries also remained a major inflationary driver, with prices increasing 4.92%. On an annual basis, producer inflation accelerated to 1.07%, reversing the 1.63% decline recorded in March.

Brazil's producer prices increased 2.37% in March 2026 compared to February, rebounding from a 0.16% drop and marking the sharpest PPI rise since March 2022. In this comparison, 18 of the 24 industrial activities saw increases in prices. The four largest increases in March were extractive industries (18.65%), other chemicals (5.03%), oil refining and biofuels (4.24%), and computer equipment, electronic products, and optics (2.50%). The rise in oil refining happened amid the spike in energy prices due to the oil shock caused by the closing of the Strait of Hormuz. Among the major economic categories, the PPI for intermediate goods was 3.75% higher, prices of consumer goods rose 0.95%, and those of capital goods fell 0.18%. The 12-month cumulative index remains negative at -1.54%. The cumulative variation for the year stands at 2.53%.

Brazil's producer prices fell 0.25% month-over-month in February 2026, with 13 of 24 sectors declining. Food led the fall for the 10th straight month at -0.87%, followed by extractives at -0.61%, refining at -0.50%, and chemicals at -0.26%. Motor vehicles reversed eight months of gains, dropping 0.68%. Top risers included electrical gear up 1.73%, perfumery up 1.44%, metallurgy up 1.41%, and apparel up 1.32%. Declines reflected weak demand and falling input costs, though selective gains in durables and staples persist. Geopolitical risks and high rates continue to dampen pricing power. The central bank's recent Selic cut may support gradual recovery, but sustained industrial price growth hinges on stronger consumption and stable energy costs, still uncertain amid Middle East tensions. The PPI fell 4.47% on a 12-month basis, while year-to-date PPI rose 0.07%.