Inflation Surging More than Expected in Brazil

Brazil’s consumer price index rose 0.87% in April the highest monthly rate since last July (0,91%) according to the latest release from the Brazilian Institute of Geography and Statistics, IBGE. Last March the index increased 0.61%.

Inflation in the first four months of 2005 has reached 2.68%, more than half the 5.1% target set by government for the whole year, and 8.07% in the last twelve months.


In 2004 Brazil’s inflation reached 7.6% which was 2.1 points above the official target although within the pre established “margin of tolerance”.


Government inflation target for 2006 remains unchanged at 4.5% with a maximum tolerance of 6.5%.


April’s inflationary surge was pushed by a 0.81% jump in food prices, well above the 0.26% of March, reports IBGE. Public transport also was a determining factor. A poll among leading companies in the private sector forecasts an annual inflation of 6.3%.


Prices continue rising faster than government estimates, increasing investor fears that the Central Bank will continue its policy of hiking interest rates to rein in inflation.


The basic Central Bank interest rate or Selic, currently stands at 19.5%, but market estimates indicate it could drop to 18% by December 2005 and to 15.5% by the end of 2006.


GDP growth estimates remain at 3.6% in 2005 and 3.5% in 2006 with a trade surplus of 34 billion US dollars and 28 billion US dollars. Private direct investment is forecasted to reach 15 billion US dollars in 2005 and a similar figure the following year.


Current account surplus has been estimated in 9 billion US dollars in 2005 and 3,6 billion in 2006.


LatAm Surplus


Latinamerica and the Caribbean countries trade surplus with the United States increased 14.7% in March reaching 8,36 billion US dollars, reported Wednesday the US Commerce Department.


During the first quarter the surplus totalled 22,48 billion US dollars compared to 17,19 billion in the same period of 2004.


Mexico’s surplus increased from 3,67 billion US dollars in February to 4,26 billion in March, totalling in the first quarter 10,8 billion compared to 10,4 billion in 2004.


Argentina’s surplus on the other hand dropped from 43 million US dollars in February to 4 million in March, accumulating 162 million US dollars in the first quarter of 2005 compared to a virtual equilibrium in the same period a year ago.


Brazil kept increasing its trade surplus with the US from 640 million US dollars in February to 749 million in March totalling 2,3 billion in the first quarter, almost six times the 2004 first quarter’s 476 million US dollars.


Venezuela one of the US main oil suppliers kept a burgeoning surplus which expanded from 1,8 billion US dollars in February to 2,4 billion last March. First quarter surplus in 2005 was 6 billion compared to 4,6 billion in 2004.


However Chile has seen its surplus drop from 183 million US dollars in February to 78 million in March totalling 613 million in the first quarter compared to 405 million US dollars in the same period a year ago.


Colombia’s surplus surged from 190 million in February to 229 million US dollars last March, with the first quarter reaching 634 million compared to 519 million last year.


This article appeared originally in Mercopress.
www.mercopress.com

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazilian Indians Sitting on World’s Largest Diamond Mine

The Brazilian government has just issued a Temporary Measure (Medida Provisória) (MP) which will ...

Digital TV: Japan Sweetens Deal and Brazil Seems Poised to Go Japanese

The Brazilian Minister of Communications, Hélio Costa, rebuffed criticism that he was "messing up" ...

Tear Down the Wall!

Perhaps the most powerful argument for eliminating visa requirements is that they’re simply a ...

US Gets Its Own Taste of Brazilian Premium and Expensive Cachaça

Americans will now be able to taste a luxurious cachaça from Brazil. The product, ...

With Such Creepy Lullabies It’s a Miracle Any Brazilian Kid Can Go to Sleep

Most Brazilian lullabies and children songs are scary like hell. Some of them are ...

Brazilian Elections Theme of Business Breakfast in New York

Weil, Gotshal & Manges, the international law firm headquartered in New York, will serve ...

Despite Exporting 13% Less Brazil’s Long Steel Leader Gets US$ 400 Million Profit

Gerdau, Brazilian leader in the production of long steel in the Americas, had a ...

Pataxó Indian from Bahia, in the Brazilian Northeast

Brazilian Pataxí³ Indians Go to Brasí­lia to Get Lands Back

A group of 15 Pataxó Hã-Hã-Hãe went to Brazil's capital BrasÀ­lia seeking a solution ...

After a Year and a Half of Deficits Brazil Gets US$ 146 Million Surplus

Brazil's current transactions (all Brazilian operations overseas) resulted in a surplus of US$ 146 ...