Brazil Consumer Prices Rise More Than Expected After Rate Hike
(Bloomberg) -- Brazil’s consumer prices rose more than forecast in July, as the central bank lifts its interest rate in efforts to bring inflation back to target next year.
Prices increased 0.96% from the month prior, just above the 0.95% median estimate from analysts in a Bloomberg survey. Annual inflation sped up to 8.99%, more than double this year’s 3.75% target, the national statistics agency reported Tuesday.
The main drivers were housing costs, which jumped 3.1% on the month -- due mainly to electricity bills that increased 7.88% -- while transportation prices rose 1.52%, the statistics agency said. On the other hand, healthcare slipped 0.65%.
Brazil’s central bank has raised the benchmark Selic 325 basis points since March. Their efforts to bring inflation to next year’s target of 3.5% have been complicated by demand for the country’s raw materials, as well as by a drought that has caused utility bills to shoot up. At the same time, residents are returning to work as the pandemic ebbs, further pressuring services costs.
Read more: Brazil Central Bank Says It Will Raise Key Rate Above Neutral
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