RIO DE JANEIRO (AFP) – Brazil’s inflation rate hit a seven-year high for the month of February, the government said on Friday, as hefty fuel-price hikes took effect that will only exacerbate surging prices, a sore spot for President Jair Bolsonaro.
The monthly inflation rate for February in Latin America’s biggest economy came in at 1.01 per cent compared to January. This was the highest for the month of February since 2015, said national statistics institute IBGE.
The annual inflation rate rose 0.16 point to 10.54 per cent, it said.
That remains far above the central bank’s target of 3.5 per cent, defying the bank’s efforts to rein in prices with one of the most aggressive series of interest-rate hikes in the world.
With the Russia-Ukraine war now pushing prices even higher worldwide, Brazil’s inflation problem is only expected to get worse – especially after state-run oil company Petrobras announced it would hike gasoline prices by 19 per cent and diesel by 25 per cent from Friday over the fallout of the Ukraine crisis.
“Higher fuel prices are likely to push the headline (inflation) rate up even further in March, to above 11 per cent,” Chief Emerging Markets Economist at Capital Economics William Jackson said in a note.