Brazil's June Inflation Falls to Slowest Pace in Nine Months

By Dow Jones Business News, 

By Paul Kiernan

RIO DE JANEIRO--Brazil's consumer inflation fell in June to its slowest pace in nine months as the waning impact of a drought earlier this year caused food prices to decline.

Brazil's IPCA consumer price index rose 0.40% last month, compared with 0.46% in May, the Brazilian Institute of Geography and Statistics, or IBGE, said Tuesday. On a 12-month rolling basis, the IPCA rose to 6.52% in June from 6.37% a month earlier.

The monthly increase was slightly higher than the 0.39% median estimate of economists surveyed by the local Agencia Estado newswire.

Brazil's inflation rose early this year as a drought sent prices for perishable food items soaring. Last month, however, food and beverage prices declined by an average 0.11% from May, weighing on the consumer price index.

On the other hand, soccer's World Cup, which Brazil is hosting and which began June 12, caused prices for hotels to rise 25% on average and airfares to rise 22%, the IBGE said.

Brazil's central bank aims to keep inflation at 4.5%, plus or minus two percentage points. Though the 12-month IPCA rose above that target last month, economists don't foresee interest-rate increases anytime soon because the index is expected to decline toward the end of this year.

Write to Paul Kiernan at

  (END) Dow Jones Newswires
  Copyright (c) 2014 Dow Jones & Company, Inc.

This article appears in: International , Economy

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