Brazil consumer prices continue to fall
BRASÍLIA: Consumer prices in Brazil fell for a second consecutive month in August, by 0.36 per cent from July, while 12-month inflation dropped under 10 per cent, the IBGE statistics institute said Friday.
The biggest contributor to the decrease was lower transport costs, said the institute.
This was driven, in turn, by lower fuel prices due to a cut in state fuel taxes introduced by the administration of President Jair Bolsonaro.
In July, consumer prices had fallen by 0.68 per cent in Latin America’s biggest economy, the lowest since records began in 1980.
Over the 12 months to August, inflation came to 8.73 per cent, said the IBGE -- still far above the central bank’s target of 3.5 per cent.
For the year to date, the figure was 4.39 per cent. Upforreelectionnextmonth,far-rightbolsonaro is trailing in the polls behind his letist nemesis, expresident Luiz Inacio Lula da Silva.
Critics accuse the president, who has also introduced expensive welfare benefits, of using economic populism to boost his election chances.
Polling shows the economy to be voters’ top concern. As economic figures have improved, so has Bolsonaro’s polling, narrowing the gap between himself and Lula.
Brazil registered growth of 1.1 per cent in the first quarter and 1.2 per cent in the second, as well as a drop in unemployment on top of the inflationary relief.
Haunted by a history of hyperinflation, Brazil’s central bank reacted aggressively to global price surges unleashed by the coronavirus pandemic and Russia’s invasion of Ukraine.
Since March 2021, the bank has rapidly raised the benchmark interest rate from an all-time low of two per cent to 13.75 per cent.