Key facts
- Brazil's annual inflation rate slowed to 4.44% in July.
- This marks a deceleration from 4.64% in June and 4.72% in May.
- Lower food and beverage costs, particularly for coffee, fruits, and vegetables, contributed to the slowdown.
- Rising housing costs, driven by electricity bills and tax adjustments, accelerated inflation in that category.
- Transport costs also slowed, influenced by lower fuel prices.
- The current inflation rate falls within the central bank's target range of 1.50-4.50%.
Brazil's inflation rate eased to an annual 4.44% in July, a decrease from 4.64% in June and 4.72% in May, according to data released by the national statistics agency IBGE. This slowdown brings the inflation rate within the central bank's target range of 1.50-4.50%.
Lower prices for food and beverages, including coffee, fruits, and vegetables, were key drivers of the deceleration. However, housing costs saw an acceleration in inflation to 5.93% from 5.85% a month prior, primarily due to increased electricity bills and tax adjustments in some southern regions. Transport costs also slowed to 3.64% annually, influenced by reduced prices for ethanol, diesel, gasoline, and compressed natural gas, despite a rise in airfares.
The central bank anticipates inflation to conclude 2026 at 5.03%, exceeding its target range. Projections for subsequent years are 4.22% for 2027 and 3.8% for 2028. In its most recent meeting, the central bank implemented a fourth consecutive quarter-point rate cut, lowering its target rate to 14% from 15%, where it had been held since mid-2025 to combat inflation.