By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Financial institutions consulted by Brazil’s Central Bank (BC) have once again reduced the estimate for inflation this year from 3.89 percent to 3.71 percent. The forecasts are in line with the latest results of the Consumer Price Index (IPCA) which registered a deflation of 0.21 percent in November.
According to the IBGE (Brazilian Geography and Statistics Institute) which measures the country’s official monthly inflation, electricity was responsible for the largest negative impact on the index, falling 4.04 percent in prices in November.
“We had the tariff level change. It was on the red flag level and then turned yellow. That was the main thing,” explained IBGE analyst Pedro Costa.
The inflation result in November was the lowest rate for the month since 1994 and the overall lowest inflation rate since July of 2017, when there was deflation of 0.23 percent.
According to IBGE analysts, costs in the sector of housing, transport, clothing, health and personal care and communication all registered negative inflation numbers.
On the other hand, education costs rose by 0.04 percent while food and beverages costs increased by 0.39 percent.
For 2019, the market forecast for inflation was reduced for the fifth consecutive time, from 4.11 percent to 4.07 percent. In 2020, inflation is expected to remain at 4 percent.
The Selic (benchmark interest rate) should rise again in 2019, according to a market consensus, closing the period at 7.5 per year. The first meeting of the Monetary Policy Committee (Copom) for 2019 is scheduled to take place in February.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error