BRASILIA: Brazil's 12-month inflation dropped to 6.97 percent in October from 7.31 percent in September, still higher than the 4.5 percent target eyed by the government, the state statistics agency said Friday.
Consumer prices climbed 0.43 percent in October month-on-month, the Brazilian Geography and Statistics Institute said.
Although the October figures did not meet the official target, authorities hope for a gradual reduction in prices by the end of the year.
In September, month-on-month inflation reached 0.53 percent and 7.31 percent over 12 months, the highest in six years.
The government has set an annual inflation target of 4.5 percent, with a ceiling of 6.5 percent.
"Brazil is managing to contain inflation because the dollar remains artificially low, which makes imports cheaper and because of the fall of world prices for commodities, of which Brazil is a major exporter," said Dercio Munoz, an economics professor at the University of Brasilia.
But he added that the index remains high for Brazilians because the tax burden and the interests paid to banks by families and companies also remain high," he added.
Authorities had forecast a gradual drop in inflation before the contraction of the world economy.
Last year, inflation reached 5.91 percent, its highest level since 2004.
This year, the Central Bank is expecting close to 6.5 percent but said that next year the rate should approach the official target of 4.5 percent.
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