Consumer prices measured by the benchmark IPCA index confirm a trend of damaging levels of inflation in Brazil. The index jumped 0.96 percent in July — the highest for the month since 2002 — and hit 8.99 percent over the 12-month period.
The upper limit of the government’s target band sits at 5.25 percent.
Of the nine groups surveyed by the Brazilian Institute of Geography and Statistics, only healthcare and personal care were down (-0.65 percent), largely due to a July decision by regulators to reduce health plan premiums by 8.19 percent.
Energy prices were the main inflation drivers — going up 7.88 percent in July. As hydroelectric reservoirs continue at alarmingly low levels, the government is relying more on thermal plants — which are more polluting and expensive.
Last week, the Central Bank’s Monetary Policy Committee raised interest rates as a way to tame inflation. “There is new pressure on volatile components, such as the possible additional increase in electricity fares and food prices, both due to adverse weather conditions,” said the committee. “Altogether, these factors imply significant revisions in short-term forecasts.”