Brazil's February inflation falls to lowest since 2000

 

Brazil's inflation rate slowed unexpectedly sharply last month, falling to its lowest for February since 2000, official figures showed Friday.

The 0.33 percent rise in prices compared to 0.38 percent in January and 0.9 percent in February a year ago, the Brazilian IBGE statistics agency said.

The surprisingly strong dip -- the average forecast from Valor financial daily's panel of analysts had been for a 0.44 percent price rise -- made more rapid interest rate cuts all the more likely.

On an annual basis -- 12 months through this February -- inflation hit 4.76 percent, the agency said. Market analysts expect the year to end with 4.36 percent inflation, while the government target is 4.5 percent.

In 2015, Brazil finished the year with 10.67 percent and 2016 ended with 6.29 percent inflation.

Latin America's biggest economy has been locked in steep recession for two years but government officials say the country has turned a corner and should see accelerating growth by the end of this year.

The Central Bank has been steadily cutting its key Selic interest rate from an October high of 14.25 percent to 12.25 percent in February, with expectations that it will be whittled down to 9.25 percent by the end of 2017.

Centrist President Michel Temer, who came to power last year after the impeachment of his leftist predecessor Dilma Rousseff, is pushing through far-reaching reforms to tame Brazil's budget and bring back investors.

By using Yahoo you agree that Yahoo and partners may use Cookies for personalisation and other purposes