Brazil posts deflation in August as fuel prices fall
By Peter Frontini
SAO PAULO (Reuters) – Brazilian shopper costs decreased 0.36% in August, marking the second consecutive month of deflation as gas costs dip, authorities statistics company IBGE stated on Friday.
The month-to-month determine as measured by the benchmark IPCA index confirmed a barely decrease drop than the market forecast of a 0.39% lower, in line with economists polled by Reuters.
Within the 12 months via August, costs rose 8.73%, properly under the ten.07% seen within the instantly previous 12 months.
Three of the 9 teams surveyed posted a destructive studying in August, with the largest drop coming from the transportation class, which retreated 3.37% within the interval as gas costs fell 10.82%.
Final month, state-run oil firm Petrobras minimize refinery gate gasoline costs by 4.9%, making the gas the best destructive affect on the IPCA index. [nL1N2ZR14X}
Services inflation slowed to 0.28% in the month, from 0.80% in July, mainly affected by a 12% plunge in airfare prices.
The improvement in the figures may indicate that the end of monetary tightening is in sight, although analysts say that the central bank may have one more interest rate hike up its sleeve.
“Hawkish comments from the central bank this week support our view that there will be one final 25 basis points interest rate hike (to 14.00%) in the tightening cycle,” said William Jackson, Chief Emerging Markets Economist at Capital Economics.
Earlier this week, Brazil’s central bank chief Roberto Campos Neto said that policymakers aren’t focusing on monetary easing at the moment as the priority remains bringing back inflation to the official target of 3.5%.
(Reporting by Peter Frontini; Editing by Steven Grattan and Jonathan Oatis)
