LatinNews Daily - 12 July 2023

* Brazil’s national statistics institute (Ibge) has released the latest consumer price index (IPCA), which registered a monthly inflation rate of -0.08% in June. Brazil’s monthly inflation had been slowing since February this year and this latest result marks the first month of deflation since September 2022 (-0.29%). The accumulated inflation rate over the 12 months until June came to 3.16%, down from the 3.94% annual inflation registered in May. This marks the first month this year that annual inflation was lower than the central bank (BCB)’s annual inflation target of 3.25% for 2023. The latest result will pile pressure on the BCB to lower the benchmark interest rate currently maintained at 13.75%. Deflation was registered in four of the nine product categories measured for the index. June’s monthly deflation was mainly driven by price decreases in food & drink (-0.66%), household items (-0.42%), and transport (-0.41%). Ibge research coordinator André Almeida attributed the deflation in the food & drink category to a recent drop in the prices of grains and legumes, such as soy, highlighting the importance of soy as a key ingredient in animal feed, thereby helping to reduce the prices of meat and dairy products as well.

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