Brazil 12-Month Inflation Accelerates to 2.65% in Month Through Mid-Sept.

By Jeffrey T. Lewis

SAO PAULO--Brazil's 12-month inflation rate accelerated in the month through mid-September as food and transportation prices rose.

Consumer prices rose 0.45% in the period from Aug. 16 through Sept. 15, the biggest increase for the month since 2012, and rose 2.65% from a year earlier, Brazil's Institute of Geography and Statistics, or IBGE, said Wednesday. Consumer prices rose 0.23% in the month-earlier period and rose 2.28% in the 12 months through mid-Aug.

The rise in the month was bigger than many economists expected, and could be a sign of growing pressure on prices.

Brazil's central bank last week chose to leave its benchmark interest rate unchanged at a record low of 2% and signaled that there's likely little room for more cuts to help boost economic growth.

The bank also said it doesn't plan to reduce monetary stimulus unless the outlook for inflation gets worse. The bank's inflation target for 2020 is 4% and for 2021 the target is 3.75%.

Some food prices have been rising quickly in recent weeks, because of strong demand from abroad for some products such as beef and because the weak real makes exports of some foods more profitable for Brazilian producers than selling at home.

The price of food rose 1.48% in the month through mid-September, after an increase of 0.34% in the month through mid-August, with the price of meat up 3.42% in the month and rice costing 9.96% more than the previous month.

Transportation prices rose 0.83% in the month, with the price of gasoline up 3.19% in the period.

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