Key facts
- Consumer prices rose 0.14% in October, slowing from 0.82% in September; economists had forecast a 0.25% rise.
- Food and beverage prices rose 1.04% in October, while transport fell 0.59% and housing fell 0.51%, IBGE said.
- The central bank targets annual inflation at 3%, plus or minus 1.5 percentage points.
- Capital Economics economist William Jackson said a return to easing requires inflation to trend down, probably from March, and fiscal reform.
Brazil's consumer prices rose 4.63% in the 12 months through October, statistics agency IBGE said on November 12, up from 4.58% in September but below the 4.73% economists in a Reuters poll had expected. The reading remained above the central bank's target of 3%, plus or minus 1.5 percentage points.
On the month, prices rose 0.14%, slowing from 0.82% in September; economists had forecast a 0.25% rise. IBGE said food and beverage prices rose 1.04%, while transport costs fell 0.59% and housing fell 0.51%.
The central bank last week paused an easing cycle it launched in March, holding its benchmark Selic rate at 13.75% as it deals with a worsening inflation outlook. President Luiz Inacio Lula da Silva's reelection last month has been accompanied by a weakening of the Brazilian real and higher long-term interest rates and inflation forecasts, according to the report.
"A return to monetary easing requires inflation to return to a downwards trend, which will probably occur from March, as well as fiscal reform to reduce risk premia," Capital Economics chief emerging markets economist William Jackson said.