FX.co ★ Brazil Inflation Rate Rises Less Than Expected

Brazil’s annual inflation rate rose to 4.63% in October, up from 4.58% in September, coming in below market expectations of 4.74%. This was the second consecutive monthly increase and the highest rate in four months. The acceleration was mainly driven by faster price growth in food and beverages, where inflation climbed to 5.73% from 4.66% in September. Inflation also picked up for household articles (2.88% vs. 2.08%) and communication (3.68% vs. 2.79%), while education inflation inched up to 5.96% from 5.95%.

By contrast, transport inflation slowed to 3.2% from 3.94%, reflecting a moderation in fuel inflation to 4.3% from 4.97%. Price growth also eased in housing (4.01% vs. 4.22%), clothing (3.21% vs. 3.34%), health and personal care (5.42% vs. 5.75%), and personal expenses (5.8% vs. 5.9%).

On a monthly basis, consumer prices increased 0.14% in October, after a 0.82% rise in September, again undershooting market forecasts. Cumulatively, inflation stood at 4.1% as of October.