Brazil's consumer prices rose 0.79% in May, the fastest pace in more than three years, underscoring concerns about inflation pressures in Latin America's largest economy. The official benchmark IPCA consumer price index showed that prices of rice, meat and other staple food items kept pushing inflation as they had done in previous months.
The 0.79% of May is the biggest monthly increase since a 0.87% rise in April 2005, pointed out the IBGE (Brazilian Institute of Geography and Statistics). Inflation in April was 0.55%. A Brazilian central bank survey among economists and market analysts anticipated 0.63%.
Food and beverage prices jumped 1.95% in May after a 1.29% increase in April and were the main culprit for the quickening of the inflation rate. Prices of soccer tickets surged 19.7% while banking services rose 8.74% and manicure costs were up 1.37%.
Brazil's central bank raised its benchmark Selic lending rate last week for the second time in less than two months to curb resurgent inflation and prevent the economy from overheating. The central bank hiked the Selic to 12.25%, the second consecutive 50-basis-point rate hike.
In the 12 months to May the IPCA rose 5.58% compared with a previously reported 5.04% increase in the year to April and 5.25% in the year to mid-May, the IBGE said.
The central bank, which uses the IPCA as a guide when setting interest rates, has a 4.5% inflation target for 2008 and 2009.
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