LatinNews Daily - 11 January 2023

In brief: Brazil’s annual inflation down but remains above target

* Brazil’s national statistics institute (Ibge) has released the latest inflation figures, showing monthly inflation of 0.62% in December 2022, bringing the annual inflation rate to 5.79%. This is down from annual inflation of 5.9% in November and annual inflation of 10.06% at the end of 2021. However, the 2022 rate still exceeded the central bank’s inflation target of 3.5% +/- 1.5. The governor of the central bank, Roberto de Oliveira Campos Neto, was obliged by the monetary policy regulatory framework to write an open letter explaining the reasons why annual inflation exceeded the bank’s upper tolerance limit. In this letter he lists the main reasons as the “inertia” of the 2021 inflation; commodity price increases; global supply chain issues; food prices shocks; and a resumption in the demand for services driven by the decline of coronavirus (Covid-19) cases and the consequent increase in mobility. The inflation rate for the month of December was up from a monthly rate of 0.41% in November. Monthly inflation in December 2022 was driven mostly by price increases for health and personal care (+1.6%) and food and drink (+0.66%).

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