Brazil: Inflation rises in June
Inflation rose for a second consecutive month in June, coming in at 4.2%, up from May’s 3.9% but still undershooting market expectations. Looking at the details of the release, prices for transportation plus food and beverages increased at a quicker pace. Conversely, housing and utilities, plus clothing price growth moderated.
Accordingly, the trend pointed up mildly, with annual average inflation coming in at 4.4% in June (May: 4.3%). Meanwhile, core inflation edged down to 3.7% in June from the previous month’s 3.8%.
Finally, consumer prices rose a seasonally adjusted 0.21% in June over the previous month, below the 0.46% increase logged in May. June’s result marked the weakest reading since March.
Our panelists project inflation to stabilize around its current level until the end of 2024, remaining comfortably within the Central Bank of Brazil’s 1.5–4.5% tolerance band. However, additional extreme weather events, rising food costs and a weaker-than-anticipated real are upward risks.