RIO DE JANEIRO, BRAZIL – The National Broad Consumer Price Index (IPCA), Brazil’s main inflation index, closed in April with a change of 1.06%, according to IBGE.
This is the highest deviation for an April month since 1996, shortly after the implementation of the Real Plan. The month’s highs were driven primarily by food and fuel.
The cumulative change in IPCA over the past 12 months was 12.13%.
The monthly inflation rate moderated slightly in April compared to the previous month, after increasing at the beginning of the year:
- In January, the monthly inflation rate was 0.54%, and the 12-month cumulative rate at that time was 10.38%;
- In February, it was 1.0% and 10.54% in 12 months.
- In March, it was 1.62% and 11.30% in 12 months.
It is already certain that inflation will remain above the 5% target despite the central bank’s propagated strategy of consistently raising interest rates.
Nevertheless, the outlook for Brazil remains positive. There are very few central banks in the world that pursue such a focused anti-inflation policy as Brazil.
At the last meeting of the Central Bank’s Monetary Policy Committee (Copom) on May 5, the interest rate was raised by one percentage point to 12.75%.
Market expectations in the latest Focus bulletin are that the annual IPCA will be close to 8% by the end of the year.