Brazil consumer prices likely up in Sept

Brazil’s consumer prices are expected to be higher in September than that of August, due in part to severe drought wave that negatively affected agricultural output, Reuters reported on Tuesday.

High inflation prompted the central bank to stop an interest rate cuts and then to hike rates last month. Some policymakers see the procedure of little help as long as public spending continues upward trajectory.

The IPCA consumer price index for September, scheduled for release on Wednesday, is expected to have increased by 0.46 per cent compared to August and 4.43 per cent year-on-year.

Higher energy tariffs combined with lower storage levels at hydroelectric plants caused by a lack of rain, as well as increased cigarette prices, were two important factors leading to faster inflation last month.

On top of that, “the first effects of the drought will put pressure on some food and beverage prices, such as fruit, meat, milk and dairy products, baked goods, drinks and infusions,” said Bruno Imaizumi, an economist at LCA Consultores.

Attribution: Reuters

Subediting: M. S. Salama