Brazil’s inflation rate rose to 5.06% in February 2025, exceeding market expectations and reaching a 17-month high. This increase was driven by significant price hikes in housing, utilities, food, and clothing, despite a slight decline in transportation costs. Monthly consumer prices increased by 1.3%.
In February 2025, Brazil’s annual inflation rate increased to 5.06%, a notable rise from 4.56% in January. This marks the highest inflation level since September 2023 and exceeds market expectations of 5%. This escalation suggests limited capacity for the Central Bank of Brazil to adopt a more lenient monetary policy amidst a slowing GDP growth.
Consumer price increases were primarily driven by housing and utilities, which saw an increase of 3.78%, up from a decrease of 0.36% in January. The upward trend in power costs rebounded sharply to 0.33%, contrasting sharply with the significant decline of 13.98% the previous month, largely due to the wear-off effects of government credits on electricity bills.
Further inflationary pressures were observed in food and beverages (7.25% compared to 7%), clothing (increased to 2.95% from 2.49%), and household maintenance goods and services (up to 1.51% from 0.99%). However, transportation inflation experienced a slight softening, recorded at 5.21%, down from 5.32%. Overall, consumer prices progressed by 1.3% from the prior month.
The rise in Brazil’s inflation rate to 5.06% in February 2025 underscores the challenges facing the economy, particularly amidst a slowdown in GDP growth. Increased consumer prices in essential sectors such as housing and food highlight persistent inflationary pressures, potentially constraining the Central Bank’s monetary policy options moving forward.
Original Source: www.tradingview.com
