Brazil's mid-October inflation slows, core measure dips below 5%

Inflation in Brazil slowed down in the month to mid-October, coming in below market expectations, statistics agency IBGE said on Thursday.

Consumer prices as measured by the IPCA-15 index rose 0.18% in the period, IBGE said, down from a 0.48% increase last month. Economists polled by Reuters expected a 0.25% increase.

In the 12 months to mid-October, inflation reached 4.94%, below the 5.01% expected in the poll but still far above the central bank's 3% target, which has a tolerance range of 1.5 percentage points on either side.

October data confirms that a previous inflation rebound was driven largely by temporary factors and base effects, Pantheon Macroeconomics' chief Latin America economist Andres Abadia said in a note.

"Brazil's disinflation is broadening across key CPI components, with both headline and the core measure easing back below 5%," Abadia said.

Prices in the month to mid-October rose in six of the nine groups surveyed by IBGE. Food and beverage prices, which pushed overall inflation higher earlier in the year, fell 0.02% in the period, marking their fifth consecutive monthly decline.

Brazil's central bank in its latest meeting kept interest rates at a near two-decade high of 15%, signaling the maintenance of a prolonged pause after a tightening cycle that lifted borrowing costs by 450 basis points since September 2024.

(By Sao Paulo Newsroom; tel: +5511 56447500)