Consumer prices in Brazil rose by 0.47 percent last month, according to the latest inflation report from the country’s official statistics agency IBGE. The 12-month rate dropped from 12.13 to 11.73 percent.
Despite the deceleration, yearly inflation has been in the double digits for the past nine months.
The segment which had the biggest impact on May’s IPCA consumer prices index was transportation services, up by 1.34 percent last month. The hike was mainly driven by skyrocketing airfares.
According to Pedro Kislanov, who manages the IPCA survey, one highlight of the latest inflation report is the deceleration of the food and beverage segment, up by 0.48 percent (after rising 2.06 percent in April). “We now enter the Autumn-Winter phase of the year, in which the offer of food products increases and prices tend to go down,” Mr. Kislanov said.
Fuel prices also rose at a slower pace — 1 percent from an April rise of 3.2 percent. Ethanol prices even went down last month.
The report is positive news for President Jair Bolsonaro, who faces increasing pressure due to the relentless rise of consumer prices in recent months. His administration has tried to come up with a way to hold down inflation on essential goods, but their plan so far has been deemed rushed and seemingly ineffective.
Since the government laid out its strategy on Monday to lower fuel prices at the pump, Brazilian assets have crashed consistently.