Consumer prices in Brazil rose at their slowest pace for the month of October in 27 years, bringing inflation closer to the government’s target, according to official data released on Tuesday.
This is good news for President Luiz Inacio Lula da Silva’s left-wing government, whose popularity took a hit earlier this year after sharp increases in food prices.
Year-on-year inflation in Latin America’s largest economy fell to 4.68 per cent in October, down from 5.17 per cent in September.
This places inflation just above the upper limit of the official target rate of 4.5 per cent.
Prices increased only 0.09 per cent, the lowest for any October since 1998, the national statistics agency IBGE reported.
In September, prices had risen by 0.48 per cent.
The sharp slowdown was largely driven by a drop in household electricity bills, while food prices remained stable, rising just 0.01 per cent.
To keep inflation under control, the Central Bank has kept its benchmark interest rate at one of the highest levels in the world, 15 per cent, since July.
Economists and financial institutions surveyed by the Central Bank’s Focus report now expect inflation to end the year at around 4.55 per cent.
