Brazil’s consumer prices in mid- March rose less than economists forecast, easing pressure on the central bank to raise rates next month. Swap rates fell.
Prices as measured by the IPCA-15 price index rose 0.49 percent in the month through mid-March, the national statistics agency said in a report published on its website. That was less than the 0.53 percent median estimate from 33 economists surveyed by Bloomberg. Annual inflation accelerated to 6.43 percent from 6.18 percent in mid-February.
The central bank this month held its key rate at a record low for the third straight meeting, in keeping with government efforts to spur growth. Since then, reports on industrial output, retail sales and job creation all surpassed economists’ forecasts. Consumer price increases are running higher than in all major Latin American economies except Venezuela and Argentina, and inflation near the top limit of the central bank’s target range is testing its willingness to keep the rate at 7.25 percent in April.
The bank targets inflation of 4.5 percent, plus or minus two percentage points.
“Inflation will not hinder the country’s consumption or growth,” Finance Minister Guido Mantega told a Senate committee yesterday. Mantega said inflation is “under control.”
Swap rates on the contract maturing in January 2014, the most traded in Sao Paulo today, fell seven basis points, or 0.07 percentage point, to 7.77 percent at 9:21 a.m. local time. The real strengthened 0.1 percent to 2.0072 per U.S. dollar.
Inflation was led by a 1.4 percent jump in food and beverage prices, down from 1.74 percent last month, and a 0.51 percent increase in personal expenses. Housing prices fell 0.7 percent, compared with a 2.17 percent decline last month.
Economists in the latest central bank survey decreased their 2013 inflation forecast to 5.73 percent from 5.82 percent. They forecast growth of 3.03 percent this year, after the economy expanded 0.9 percent in 2012.
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