Higher Medicine, Food Prices Stoke Brazil Inflation (Jun 2013)

inflation

Source: CNA – Higher medicine, food prices stoke Brazil inflation

Notable excerpts:

Consumer prices edged up 0.3 per cent in Brazil last month, fuelled by higher medicine, clothing and housing prices, with 12-month inflation at 6.5 per cent, the state statistics agency said Friday.

The May increase, in line with market analysts’ forecasts, was lower than the 0.5 per cent recorded in April and the lowest since June 2012.

The Brazilian Geography and Statistics Institute (IBGE) said medicine prices increased by 0.9 per cent in May, clothing by 0.8 per cent and housing by 0.7 per cent.

Central Bank authorities want to bring inflation down to 4.5 per cent this year.

Last month, the central bank raised its key interest rate by 0.50 points to 8.0 per cent to control rising inflation, the second increase within weeks.

In April, the bank’s monetary policy committee pushed the rate up by 0.25 points to 7.5 per cent, the first increase since July 2011.

Experts were alarmed in March when it was confirmed that 12-month inflation reached 6.59 per cent, above the official upper limit of 6.5 per cent.

In 2012, Brazilian consumer prices rose 5.8 per cent after a 6.5 per cent hike the previous year, the highest level in seven years.

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