© Reuters. FILE PHOTO: Consumers shop at a weekly street market in Rio de Janeiro, Brazil, September 2, 2021. REUTERS/Ricardo Moraes/File Photo
SAO PAULO (Reuters) – Brazil’s inflation came in well below market expectations in its mid-January reading, statistics agency IBGE said on Friday, providing central bank policymakers with good news as they gather next week for their first interest rate decision of 2024.
Consumer prices in Latin America’s largest economy rose 0.31% in the month to mid-January, IBGE said, down from 0.40% in the previous month and below all estimates in a Reuters poll of economists, whose median forecast was for a 0.47% increase.
Annual inflation reached 4.47%, sliding from 4.72% in the previous reading and also below the 4.63% expected by market participants.
The fresh figures come as Brazil’s central bank is expected to lower its benchmark interest rate by 50 basis points for the fifth time in a row to 11.25% when its board meets on Jan. 30 to 31.
Inflation in January was driven by higher food and beverage costs, IBGE said in a report, but a drop in transportation prices partially offset those increases.
IBGE highlighted that airfares, which the government last month dubbed its biggest concern regarding inflation after a major jump in recent months, finally decreased.
