The data was released ahead of a central bank monetary policy meeting next week, with growing market bets that the aggressive tightening cycle will be extended amid persistent inflation and the recent rally in the dollar, which is boosting import prices.
The prices of eight of the nine groups of products and services surveyed rose in mid-April, with the Transportation was the one with the greatest impact, where costs rose 3.43%, driven by a 7.54% increase in fuel prices. It was followed by food and beverages, with growth of 2.25%.
Inflation in the 12 months to mid-April rose to 12.03%from 10.79% in the previous month, but also less than the 12.16% rise expected by analysts.
Still, it fell short of the official target of 3.5% for this year. The head of the Central Bank of Brazil, Roberto Campos Neto, had previously said that inflation would peak in April, reaching 11% in 12 months.
In March, he underscored that the ongoing tightening of monetary policy would likely end with a final 100 basis point hike in benchmark rates next Wednesday, unless unforeseen market disturbances changed the scenario. Rates now stand at 11.75%, having risen from a record low of 2% in March 2021.
The plan, however, was questioned by market agents, since the inflation data indicates that the increase in prices is spreading throughout the economy, aggravated by the impact of raw materials, caused by the war in Ukraine.
Source: Ambito
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