Brazil’s Focus Bulletin, released today by the Central Bank, indicates for the third week in a row that the pace of retail price increases has lost steam.
Forecasts for this year’s inflation in terms of the Broad Consumer Price Index (IPCA) have been lowered from 7.37%, two weeks ago, to 7.31%, last week, and 7.13%, in this week’s survey.
Nevertheless, there was a slight increase in estimates for inflation in 2005, from 5.80% to 5.81%.
There was a small improvement in predictions for the IPCA this month (down from 0.46% to l.45%) and for the cumulative IPCA over the 12 coming months (down from 6.18% to 6.17%). On the other hand, expectations for inflation in November rose from 0.56% to 0.57%.
The poll also indicates a decline in terms of the Consumer Price Index (IPC), compiled by the Economic Research Institute Foundation (Fipe) at the University of São Paulo. The prediction for inflation in the capital of São Paulo this year was lowered from 6.45% to 6.24%.
Unlike free market prices, which show signs of relief for consumers, administered prices (fuel, telephone services, electricity, and others) continue to climb.
The consultants and market analysts interviewed in the Central Bank’s weekly survey estimate that this year’s cumulative rate adjustments will amount to 8.58% this year, as against 8.50% in last week’s survey, while their expectations for 2005 rose from 7% to 7.20%.
Agência Brasil
Translator: David Silberstein
