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LatinNews Daily - 13 January 2021

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In brief: Inflation closes 2020 at four-year high in Brazil

* Brazil’s national statistics institute (Ibge) has released the latest figures for the consumer price index (IPCA), according to which monthly inflation totalled 1.35% in December 2020, bringing annual inflation to 4.52%. This brings Brazil’s inflation to its highest level since 2016, when it totalled 6.29%. Annual inflation fell within the upper range of the 4% +/- 1.5 target set by the central bank (BCB). A 14.09% increase in food & drink prices drove inflation in 2020, with Pedro Kislanov, the Ibge’s research manager, explaining that this increase (the highest since 2002) was driven by high demand, a strong US dollar, and the price of commodities on the international market, all within the context of the coronavirus (Covid-19) pandemic. Bruno Serra, the director of monetary policy at the BCB, noted that inflation has ended up closer to the centre of the target than initially projected (in September inflation was projected to close the year at 2.1%), and said that the rise in inflation was temporary, but that “we will have slightly higher inflation than we imagined [in coming months]”.