Brazil’s Inflation Seen Easing to 7%

Brazil’s annual inflation rate probably eased in November to the lowest level since late 2014, leaving the country’s central bank comfortable to soon accelerate the pace of interest rate cuts, a Reuters poll showed on Wednesday. Consumer prices as measured by the benchmark IPCA index likely rose 7.08% in the 12 months through November, down from an increase of 7.87% in October, according to the median of 26 estimates. Although the inflation rate in November is expected to stay above the 6.5% upper end of the government’s target band, it will still be significantly lower than the double-digit rates seen in the first months of the year. In 2017, inflation is expected to fall to around 4.5%, the midpoint of the government’s target. That scenario has prompted the central bank to consider accelerating the pace of a rate-cutting cycle started in October, offering relief for an economy mired in severe recession for two years. On a monthly basis, prices probably rose 0.27% in November, nearly unchanged from an increase of 0.26% in October, according to the median of 29 forecasts.