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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The IPCA (Consumer Price Index) for the month of February registered an increase of 1.22 percent, according to the IBGE (Brazilian Statistics Bureau). This is the highest rate for the month since February of 2005. In January the IPCA index registered an increase of 1.24 percent.

Fuel prices pressured February's inflation index, Rio de Janeiro, Brazil News
Fuel prices pressured February’s inflation index, photo by Renato Araujo/Agencia Brasil.

In the last twelve months inflation has increased by 7.70 percent, the highest rate for a twelve-month period since May of 2005. In the first two months of 2015 the inflation rate was already at 2.48 percent.

The fuel segment was the highlight of the month, with gasoline prices registering an increase of 8.42 percent. This upsurge in prices was responsible for one fourth of the IPCA inflation rate increase during the month, with 25.41 percentage points. Other fuels prices also increased, with diesel fuel registering a rise in prices of 5.32 percent and ethanol an increase of 7.19 percent in February.

As a consequence of fuel price increases the transports segment also pressured inflation, growing by 2.20 percent during the month and causing an impact of 0.41 percentage points on the index.

Other sectors which registered increases in prices include education (plus 5.88 percent), and the housing segment with electricity bills rising by 3.14 percent. The food and beverage segment grew less than in previous months, with 0.81 percent. In January the segment had registered an increase of 1.48 percent in its prices.

Two sectors registered a decline in prices during February: clothing, with registered a decrease of 0.60 percent in prices due to promotions, and communications, with a decrease of 0.02 percent in prices due to the reduction of telephone tariffs (by an average of 22 percent) from fixed telephone lines to mobile telephones during the second half of February.

The latest forecasts by financial analysts is that Brazil’s inflation index will close the year of 2015 at 7.47 percent, well above the 6.50 percent target ceiling established by the country’s Central Bank.

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