Brazil’s inflation rate increased to 5.06% in February 2025, marking a 17-month high and exceeding market expectations. Key inflation contributors included significant price rises in housing, utilities, food, and clothing. The rate continues to challenge the Central Bank’s monetary policy amidst slowing GDP growth.
In February 2025, Brazil’s annual inflation rate rose to 5.06%, an increase from 4.56% the previous month, marking the highest rate since September 2023. This growth surpassed market expectations, which had anticipated a rate of 5%. The inflation’s rise continues to place pressure on the Central Bank as it exceeds the upper threshold tolerance of 4.5%, limiting options for a more accommodating monetary policy despite a decline in GDP growth.
Consumer prices experienced a significant rebound in the housing and utilities sector, increasing by 3.78% compared to a decrease of -0.36% in January. This resurgence was influenced by a temporary government measure on electricity billing, which softened the earlier impact and led to a sharp increase of 0.33% in power costs from a -13.98% drop.
Food and beverage inflation also accelerated, reaching 7.25%, up from 7% in the previous month. Increases were noted in clothing, which rose by 2.95% versus the prior 2.49%, and household maintenance goods and services recorded a rise of 1.51%, compared to 0.99% previously. However, inflation in transportation showed a slight decline at 5.21%, down from 5.32% in the previous month.
Overall, consumer prices saw an increase of 1.3% from January to February 2025.
Brazil’s inflation rate reached 5.06% in February 2025, a rise that exceeded market expectations and constrained the Central Bank’s ability to adjust its monetary policy. Key contributing factors included significant increases in housing, utilities, food, and clothing prices. Although there was a slight decrease in transportation inflation, the overall trend indicates persistent upward pressure on consumer prices, especially in essential services and goods.
Original Source: www.tradingview.com
