Inflation in Brazil showed a slowdown in October, thanks to a decline in gasoline and ethanol prices, which helped slow the increase in transportation costs.
According to the Brazilian Institute of Geography and Statistics (IBGE), consumer prices increased by 0.24% in October compared to September. On a yearly basis, prices rose by 4.82% in October. In September, prices had risen by 0.26% and increased by 5.19% from the previous year.
Transportation prices increased by 0.35% in October, which was a slower pace compared to the 1.4% increase in the previous month. This was mainly due to a 1.53% decline in gasoline prices and a 0.96% fall in ethanol prices. However, airline ticket prices experienced a significant jump of 23.7% during the month.
The food prices, on the other hand, saw an increase for the first time in five months, rising by 0.31% in October after a decline of 0.71% in the previous month.
Economists predict that Brazil's 12-month inflation rate will decline to 4.63% by December, according to the Central Bank of Brazil's weekly survey. This would bring the headline rate within the target range of 1.75% to 4.75% for 2023, marking the first time in three years.
In its recent monetary policy meeting, the central bank reduced its benchmark Selic lending rate by half a percentage point to 12.25%. Considering the favorable outlook for inflation in Brazil, the central bank believes it can continue cutting rates at this pace in the upcoming meetings.
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