Brazil Inflation Accelerates After Energy Relief Credits Expire
Brazil’s inflation accelerated in September after a temporary energy credit came to an end and led to sharply higher electricity costs.
Official data released Thursday showed prices rose 0.48% from the month prior, below the 0.52% median forecast from analysts surveyed by Bloomberg. The figure followed August’s reading of -0.11%. Annual inflation ticked up to 5.17%.
Central bankers are making slow-going progress in their inflation fight as Latin America’s largest economy cools under high interest rates. While policymakers have voiced confidence that their plan to keep the benchmark Selic at 15% for the months to come is working, their efforts are being undercut by a hot jobs market and investor fears over Brazil’s shaky public accounts. Analysts see consumer prices running above the 3% target through 2028.
Concerns that President Luiz Inacio Lula da Silva may jack up state spending to boost his popularity ahead of next year’s general election are complicating the inflation outlook. The leftist leader has recently received a bump in the polls from his efforts to repair relations with Donald Trump, who hit Brazil with 50% tariffs earlier this year.
bloomberg.com
