Brazil's mid-August inflation slows on month, annual rate subdued


By Jamie McGeever

BRASILIA, Aug 25 (Reuters) - The monthly rate of inflation in Brazil slowed in August, according to a mid-month measure of consumer prices on Tuesday, and the annual rate picked up from the previous month but was still slightly lower than economists had expected.

The monthly rate of consumer price inflation as measured by the IPCA-15 index was 0.23% in the month to mid-August, government statistics agency IBGE said, and the annual rate of inflation was 2.28%.

Both undershot the median forecasts in a Reuters poll of economists of 0.24% and 2.34%, respectively, albeit by statistically insignificant margins. Still, they point to a distinct lack of inflationary pressures even as the economy recovers from the worst of the coronavirus crisis.

Around two thirds of the 0.23% monthly rate of IPCA-15 consumer price inflation in August was accounted for by transport costs, principally fuel prices, which rose 2.31%, IBGE said. Within that, the main component was a 2.61% increase in gasoline prices.

Increases in the cost of housing, food and drink, and health and personal care items accounted for the rest of the upward pressure on inflation, IBGE said, while a 3.27% fall in education costs accounted for the bulk of the deflationary impulse.

The accumulated rate of IPCA-15 inflation so far this year is 0.9%, IBGE said. The 2.28% annual rate of inflation remains well below the central bank's goal for this year of 4.00%, and even below the 2.5% floor of its target band.

(Reporting by Jamie McGeever Editing by Paul Simao)

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