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Brazil’s CPI super estimate due to rise in gasoline, food

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(Bloomberg) — Brazilian consumer prices accelerated to beat projections in mid-March, buoyed by rising gasoline and food costs as the Russian invasion of Ukraine wreaks havoc on global commodity markets. .

Prices rose 10.79% from a year ago, above the median estimate of 10.69% in a Bloomberg survey. Inflation has averaged more than 0.95%, reported the fourth quarter of the Brazilian Institute of Geography and Statistics (IBGE).

Brazil’s policymakers say they are nearing the end of a tightening cycle in which interest rates are raised 975 basis points from a year ago to combat above-target inflation. Those planes are being put to the test now that oil has soared above $100 a barrel amid the war in Ukraine, pushing up the cost of living even higher.

On March 10, the state-owned Petróleo Brasileiro SA, which follows international prices but tries to protect consumers from periods of high volatility, announced that it would increase fuel prices by up to 25%.

After raising the benchmark Selic rate to 11.75% this month, the central bank has signaled it plans to raise borrowing costs by an additional percentage point in May before halting the hikes. The bank’s president, Roberto Campos Neto, said this week that inflation will peak in April and then decline towards the target.

Those in charge of monetary policy point to increases in consumer prices of 3.5% for 2022 and 3.25% for 2023.

The combination of double-digit inflation and tight credit conditions is weighing heavily on the Brazilian economy. Analysts surveyed by the central bank estimate growth of just 0.5% for this year and 1.3% for 2023.

original note:

Brazil Inflation Beats Forecast as Gasoline and Food Costs Rise

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