World Economy

Brazil Inflation Reaches Three-Month High

Consumer prices rose 2.71%.Consumer prices rose 2.71%.

Brazil’s inflation rate sped up to the fastest in three months in mid-October as cooking gas prices spiked, bolstering expectations that it has finally bottomed out after hitting 18-year lows.

The reading should support the central bank’s plan to slow the pace of interest rate cuts next week as the economy emerges from the deepest recession in over 100 years, even though inflation still lags far behind the official target, Reuters reported.

Consumer prices as measured by the IPCA-15 index rose 2.71% in the 12 months through mid-October, data from government statistics agency IBGE showed on Friday, largely in line with the 2.70% median estimate in a Reuters poll of economists. A 5.7% jump in cooking gas prices accounted for most of the increase after state-controlled oil company Petroleo Brasileiro SA repeatedly hiked prices following weather-related disruptions to global supply.

Signs of steadying food prices, which fell at a slower pace than in previous months, would also suggest the rate of price hikes may be accelerating. A record harvest helped to pull down inflation from double digits early in 2016 at a faster pace than anticipated.

Inflation has been hovering below the bottom-end of the official target range, of 4.5% plus or minus 1.5 percentage point, since July, with some economists betting it will undershoot the annual goal.

Nevertheless, the central bank is widely expected to implement a smaller rate cut than in previous meetings, with expectations that it would reduce them by 75 basis points.

Meanwhile, the Brazilian economy added a net 34,392 payroll jobs in September, data from the labor ministry showed on Thursday, the sixth straight month of gains.

In the first nine months of 2017, Brazil opened a net 208,874 payroll jobs, in a further sign of labor market strength following the nation’s deepest recession in a century.

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