The IPCA-15 consumer price index — regarded as a mid-month predictor of Brazil’s official inflation rate — rose 1.2 percent in October, according to data released this Tuesday by the Brazilian Institute of Geography and Statistics (IBGE). The result is the highest for October since 1995 and the highest monthly increase since February 2016.
Market projections had forecast lower inflation for the month, with financial data firm Refinitiv expecting a 0.97-percent increase in October. Over the last 12 months, the IPCA-15 has risen 10.34 percent.
Electricity prices were the greatest factor in October’s rise, increasing 3.91 percent and making up 0.19 percentage points of the total increase. Transport came next, with an increase in fuel costs and airfares leading to a 2.06 percent hike. Food and beverages also became 1.38 percent more expensive in the last month.
Latest figures cast doubt on Central Bank president Roberto Campos Neto’s claims that Brazil’s inflation would peak in September. Indeed, the current inflationary spiral was played down as a temporary blip when it first appeared over a year ago.
Official inflation is well above the government’s 3.75 percent target, even surpassing the upper limit of the administration’s tolerance band.