BRASÍLIA (AFP) – Brazil’s annual inflation rate fell for the 10th straight month in April, to 4.18 per cent, the national statistics institute said on Friday, bolstering President Luiz Inacio Lula da Silva’s push for growth spurring interest rate cuts.
The rate, which was within the central bank’s target range for the second straight month, was down from 4.65 per cent the previous month, hitting its lowest level since October 2020 when it stood at 3.92 per cent, according to figures from national statistics institute IBGE.
The monthly inflation rate came in at 0.61 per cent, down from 0.71 per cent in March, IBGE said.
That was higher than the average forecast of 0.55 per cent by 46 specialists polled by business daily Valor.
But analysts said the latest figures added to evidence the central bank’s hawkish inflation-fighting campaign was working. “The sharp fall in Brazilian inflation was encouragingly broad based” across the different categories of goods surveyed, notably food prices, said chief emerging markets economist at consulting firm Capital Economics William Jackson.
However, he cautioned that did not mean the central bank would start interest-rate cuts just yet. “We think the central bank will want to see more evidence that core price pressures are easing,” he wrote in a note.
Lula, who took office in January, has called Brazil’s benchmark interest rate “absurd” at 13.75 per cent, saying it is stunting the growth of Latin America’s biggest economy.
The veteran leftist’s administration fears a recession, after Brazil’s sluggish economy contracted 0.2 per cent in the fourth quarter of 2022 the last under ex-president Jair Bolsonaro.