BRASILIA: Brazil's inflation rate accelerated for the first time this year in mid-April but still undershot economist expectations, keeping the central bank on track to cut interest rates to an all-time low next month.
Consumer prices tracked by the benchmark IPCA index rose 2.80 percent in the 12 months to mid-April, government statistics agency IBGE said on Friday, slightly below the median 2.84 percent estimate in a Reuters poll.
The reading underscores the central bank's struggles to lift inflation back to this year's target range of 4.5 percent plus or minus 1.5 percentage points after missing it for the first time last year.
High unemployment and widespread idle capacity, as well as an unexpectedly long stretch of food deflation, have kept a lid on price increases this year.
Food prices rose in mid-April after falling the month before, suggesting fading downward pressure. The IPCA rose 0.21 percent from the month before, a faster monthly rate than March but still below a consensus 0.25 percent estimate.
But the slow acceleration in inflation may not be enough for it to end the year at the target's midpoint, allowing the central bank to extend the deepest rate-cutting cycle in a decade at its May meeting.
A central bank survey put 2018 inflation at 3.48 percent, accelerating to 4.07 percent in 2019.
Central bank chief Ilan Goldfajn has repeatedly stressed a plan to cut the benchmark Selic interest rate by another 25 basis points next month and then stand pat as it considers the economic outlook.
Comments
Comments are closed for this article.