Key facts
- Brazil's annual inflation rate slowed to 4.64% in June.
- The consumer price index (IPCA) decelerated from 4.72% in May.
- Lower motor fuel prices helped offset higher electricity bills.
Brazil's annual inflation decelerated to 4.64% in June, down from 4.72% in May, as lower motor fuel prices counteracted rising electricity costs. Food and beverage prices also saw a slight decrease.
The slowdown in Brazil's inflation provides some relief to consumers and may influence future monetary policy decisions by the central bank, potentially impacting borrowing costs and economic growth.
Brazil's inflation slowed to an annual rate of 4.64% in June, a deceleration from 4.72% in May, according to data from the national statistics agency IBGE. This slowdown was primarily driven by lower motor fuel prices, which helped to offset increases in electricity bills.
Housing costs, a significant contributor to the index, saw their annual rate decelerate to 5.85% from 6.22% in May, largely due to tax readjustments for power supply in some southern states. Food and beverage costs, a major component of the index, also contributed to the monthly decrease, decelerating to an annual 3.82% from 3.87% in May, with lower prices for coffee, fruits, and meat cited as key drivers.
Transport costs slowed to 3.95% in June from 4.05% in May, influenced by decreased prices for ethanol, diesel, gasoline, and compressed natural gas, despite a rise in airfares. The annual inflation gain for June was notably lower than the 5.35% recorded in June 2025.
Inflation expectations, as surveyed by the central bank, remain above the target, with forecasts at 5.3% for 2026 and 4.18% for 2027. In line with efforts to manage inflation, Brazil's central bank reduced its target interest rate to 14.25% in June.
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