Brazil Inflation Surpasses Government Target and Reaches 5.04%

    Brazil supermarket

    Brazil supermarket The Consumer Prices Index in Brazil experienced its biggest increase in four months in April, 0.55% (up from March's 0.48%) because of higher food costs, according to the Brazilian Institute of Geography and Statistics (IBGE).

    The index was in line with analysts expectations but is considerably higher than April 2007, 0.25%. The CPI for the first four months now stands at 2.08%, compared to 1.51% a year ago, added IBGE. In the last twelve months inflation was 5.04%, which is above the target established by the Central Bank.

    The current inflation targets for 2008 and 2009, with a two percentage points tolerance has been established at 4.5%.

    IBGE said food prices were responsible for almost half of April's inflation having jumped 1.29% in April compared to 0.89% in March.

    "Inflation profile this year is similar to last year's but since food prices are putting on more pressure, inflation in 2008 begun at a higher level. Higher food prices will be almost constant the whole year," said IBGE economist Eulina Nunes dos Santos adding that this year's "inflation will be mostly international."

    Brazil's central bank policy makers increased the benchmark interest rate for the first time in three years last month in an attempt to contain inflation.

    Nunes dos Santos further warned that "there's no reason to believe that May's CPI will be lower. There are no indications of such a tendency internationally and we don't believe food prices will ease sufficiently to have a real impact." Inflation in May last year was 0.28%.

    Food staples had the major impact in April's CPI, followed by clothing, hygiene products and medicines, which increased 1.53%, 1.41% and 1.18%. On the other extreme non food prices slowed down to 0.34% in April from March's 0.34%.

    Regarding energy prices the strong Brazilian currency and biofuels helped to bring down prices by 0.65%, 0.49% and 0.14% respectively for ethanol fuel, electricity and gasoline.

    Mercopress

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    • Show Comments (9)

    • ..

      [quote]Looks like YOU are totally IDIOT…… ! [/quote]

      LOL, brother. Not only me, but U too.

      [quote]Short memory on purpose,[/quote]

      You got it. On purpose 😉

    • ch.c.

      To the idiot……
      But….but….but……the Brazilian INFLATION – OUTSIDE THE IGP-M – has also been up up up and up…..many times during the last 100 years !!!!!
      DONT YOU KNOW THAT, IDIOT…… ?
      Short memory on purpose, or total ignorance about YOUR OWN history ?

      And look at what the free market is quoting the future SELIC rates (raised to 11.75 % recently :
      – 6 months out…..13.15 %
      – 12 months out….14.07 %

      Therefore you see…..I AM NOT ALONE….thinking the same thing !!!!

      Furthermore, as I said, just remember the first interest rate change, from up to down or down to up, is 95 % of the time the first change…in a serie of more changes.

      Looks like YOU are totally IDIOT…… !

    • dnbaiacu

      Joao
      [quote]Hell Joao[/quote]

      That was “Hello”) 🙂 which I am sure you figured out. Good to hear from you too. I went to Brazil early April for a week. I’ve been busy ever since on the return to the States. There haven’t been any really interesting articles to comment on , so I have been quiet. But you c,ch and “,…, ” keep me interested. I depend on the 3 of you guys comments plus “panorama economico” in the “Correio da Bahia” to sift through the hype of some of the stats from the newsroom of the articles on this mag.

      [quote]. My view point is that it will be just RIC. Those three have something called “well educated mass”[/quote]
      The point exactly! Let’s hope the masses won’t get exploited too bad. Being extended credit, but with runaway inflation and rising interest rates entrapment. The pressure is on to “consume” .. It’s a frenzy. I can tell by what I see and the conversations that I am having with my folks. My tia and tio have already re-painted a car they have only had for 2 years.
      I’ve had that thought about it just being “RIC” also. You just kinda wish it could be different. Well we’ll just have to watch the show roll on. It’s pure theatre, there and here in the States. Gas it headed to $4 a gallon average here. Hilary is done with. And the summer olympics are coming. And so much more going on. 2008 will be a year to remember. I am SURE of it.
      Be Good

    • João da Silva

      dnbaiacu
      Hi

      [quote]I like to hear you guys go at it with economics. He’s on top of things and tickles me to see some get upset with him and defend Brazils’ fiscal policies.[/quote]

      If you discard his anti Brazilian rants and just look at the numbers, he is absolutely correct. He should learn how to differentiate between good hard working and bad Brazilians.He has been learning about this issue, though he is a slow learner in this aspect! Why shouldn’t anyone question about BrasilÀ‚´s fiscal policies. I question them all the time.

      [quote]It is not like he’s a true enemy , he is invested in the country….He keeps it real and it is funny.[/quote]

      No I don’t think he is a true enemy.If you have read all his comments you will would discover that he is the “father of the poor”. His motto is “Create a lucrative commercial venture, pay the serfs well and make everyone happy”. I endorse this view.

      [quote]BRIC has joined the “system”. I’d like to see economy buffs talk more about THIS.[/quote]

      You better wait till Ch.c comes out with his acid comments on this. My view point is that it will be just RIC. Those three have something called “well educated mass”.Just read the Curriculum Vitae of the leaders of the RIC countries. IC are super populated. R is not.

      We better come out with “Plano B” real fast, as we can not live on speculations (or Novelas) for ever.

      AND, it is good to hear from you again. Take care.

    • dnbaiacu

      Hell Joao
      LOL LOL 😉

      I like to hear you guys go at it with economics. He’s on top of things and tickles me to see some get upset with him and defend Brazils’ fiscal policies. It is not like he’s a true enemy , he is invested in the country….He keeps it real and it is funny. I have yet to find a site with a blog column where anyone has close to a clue to what’s behind the U.S economy. People blame Bush and think Bernake is plain stupid. They don’t realize that neither of the two control much of anything. Bernake is just there to keep the masses from thinking that this is anything but deliberate. So they miss the whole game altogether. IT’S CRAZY!
      Brazil did a lot of political posturing not jumping on board with FTAA , only to get annexed from behind taking a loan from the IMF simultaneously getting investment grade rating from S&P.Brazil had to join the game one way or another , it is unavoidable.
      That whole facade of the “dominate” U.S. other nations feed the public to placate their political opions.
      The U.S owes,, “guess who”,,, The Federal Reserve Bank” . And no one knows “who” is running that. But there is a direct connection between the Fed and the IMF, World Bank, and no one talks about that.
      BRIC has joined the “system”. I’d like to see economy buffs talk more about THIS.

    • João da Silva

      dnbaiacu
      [quote]I like reading your comments. Informative and entertaining. Keep them coming. It is giving , me at least. a balanced perspective.[/quote]

      Good Lord, you just caused Ch.cÀ‚´ego to burst! You don’t have to ask him to “keep his comments coming”. He will, with or without your approval 😉 😉

    • dnbaiacu

      ch.c is a realist
      I like reading your comments. Informative and entertaining. Keep them coming. It is giving , me at least. a balanced perspective. You will have to be “very rich” or extremely savvy an smart with your money more than ever now, to keep afloat. Most are doomed to chase the wind and illusions. It’s incredible. Like a show or a game. Watching the whole “emerging” process. And seeing it for what it really is………

    • ..

      [quote]With some voluntary manipulation…in the above stats…to hide a darker truth ![/quote]

      You are really a doomsday naysayer.

      [quote]Worse yet, yesterday the IGP-M came out, a true disaster :
      “Brazil’s IGP-M general price index jumped to 1.36 percent in the month to May 8, compared with a median estimate of a 0.58 percent rise by economists surveyed by Bloomberg. The index rose 0.33 percent in the previous period, the Getulio Vargas Foundation said in Rio de Janeiro today.”[/quote]

      I don’t see any “true disaster”. IGP-M general price index has been jumping up and down for centuries and it is called “ajustamento econÀƒ´mico”. Our Minister of Economy Dr.Mantega is on the job working to correct this anomaly and I am confident that he will bring the situation under control by next Wednesday.

      I recommend that you being “an opportunistic investor” buy more government bonds to help Dr.Mantega in his efforts. You are doing a terrific job and why interrupt it, just because IGP-M index has jumped a bit?

      I am not worried about the Brazilian economy and nor should you be.

    • ch.c.

      With some voluntary manipulation…in the above stats…to hide a darker truth !
      The 2,08 % for the first 4 months is NOT annualized…but 2.08 in 4 months !
      Or around 6.25 % annualized for 2008.

      Worse yet, yesterday the IGP-M came out, a true disaster :
      “Brazil’s IGP-M general price index jumped to 1.36 percent in the month to May 8, compared with a median estimate of a 0.58 percent rise by economists surveyed by Bloomberg. The index rose 0.33 percent in the previous period, the Getulio Vargas Foundation said in Rio de Janeiro today.”

      Conclusion from some Brazilians and foreign analysts (not me) :
      ““There’s even some talk that the bank may raise rates by 0.75 percentage point in its next meeting.”

      Your 3 months government paper is yielding 12.31 %, 6 months at 13.23 and 1 year at 14.05 %

      FASTEN YOUR SEAT BELT BRAZIL !
      After a change in trend (up or down – but up this time) in interest rates, as you have had a week or two ago, the serie continue for a while….IN THE SAME DIRECTION !!!!!!!
      Meaning that SEVERAL more interests rates increase will follow for the forseable future !!

      🙁 🙁 🙁 🙁

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