MNI BRIEF: Brazilian July Inflation Up To 4.50%
MNI (BRASILIA) - Brazil's IPCA inflation was 0.38% in July, in line with the 0.35% consensus and up from 0.21% in June. In annual terms, prices rose by 4.50%, up from 4.23% in June, the Brazilian Institute of Geography and Statistics (IBGE) said Friday. The consensus was for 4.47%.
While one reading is unlikely to weigh greatly on Central Bank of Brazil thinking, rising inflation and currency weakness are together likely to prompt it to keep its Selic rate at 10.5% this year, MNI was told earlier this month. (See MNI INTERVIEW: Copom To Hold Rates Despite Hawkish Tone -Velho)
"This increase in the index was driven by gasoline prices, which rose by 3.15%, and also by airline tickets, which increased by 19.39%. Another contribution to the rise in the IPCA came from residential electricity tariffs (1.93%)," IBGE said.
In July, there was a price increase in seven of nine groups of products and services surveyed. The largest variation, 1.82%, and the greatest impact, 0.37 percentage points, came from Transportation, followed by Housing (0.77% and 0.12 percentage points).