Lower Food Price Helps Bring Down Inflation in Brazil

Brazilian supermarket Brazil's Consumer Prices Index (CPI) slowed down to 0.53% in July from 0.74% the previous month, according to a release from the Brazilian Geography and Statistics Institute, IBGE. The percentage was in the range anticipated by economists which are consulted on a weekly basis by the Brazilian Central Bank. In July 2007, the CPI index was 0.24%.

In June food and beverage prices had the largest incidence on the monthly index but the item decelerated considerably from 2.11% to 1.05% in July.

In the first seven months of this year the CPI reached 4.19% which is almost double the 2.32% of the same period in 2007.

Annual inflation to July reached 6.37%, up from the last twelve months to June 6.06%, which still is in the higher bracket of this year's Central Bank target of 4.5%, plus/minus two percentage points.

However most private financial institutions from Brazil forecast annual inflation will be above 6.5%.

The Brazilian keeping to its orthodox approach against inflation tightened credit policy this year by 175 points taking the reference Selic rate to 13%.

For Valmor Rovaris, the superintendent of Apras (Paraná's Supermarkets Association) the Brazilian food sector is stable. The deceleration of prices for food and drinks going from an increase of 1.05% in July compared to 2.11 in June shows that, he says.

"Since 1994, food prices kept below several other items, such as communication, transport, energy and inflation. What occurred in the recent months can be credited to a recovery in the sector," Rovaris argued. According to him,  there is no interest by the companies to boost prices. Most, he added, even holds any increase, fearing the competition, since the market is competitive.

"An option supermarket came up with was to sell cheaper products using products with their own label, something that has been well received by the public. Consumers are abandoning their loyalty to brands," he noted.

Mercopress/Bzz

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  • Show Comments (2)

  • ch.c.

    Joao !!!!!!
    Hopefully you had read my detailed comments…..in answer to your recent question !
    Also remember my vision for the US$. Well from last Thursday when Trichet spoke to now (Monday at 2;26 AM European time, the Euro is down 3,7 % !
    Just unheard in such a short time. Simple ! And I am smiling when last week a new forum member with an asian name wrote
    “buy the Euro” ! Not very clever !

    This said if you paid attention to my comments on the Brazilian interests rate, well now you have the confirmation the free market NEARLY always anticipate the actual stats.

    I repeat : the USA are by now the best and cheapest EMERGING market. The US$ has reversed its multi year down trend and will go up for 2 to 4 years, until it will re-enter its secular down trend against the very few few strong world currencies.

    Goodbye…..Brazilian Reais….against the US$. But that doesnt mean it will be weak against the Euro !

    I must then suppose that in 6 to 12 months, at best, your filthy government with their filthy stats, will either do their maths back into the Brl currency, to show continued rosy numbers. For the last few years they used the weakened US$….to cheat on you.
    Or may be they will switch their stats in Euro currency…to show continued HIGH growth !!!! simple ! D 😀 😉 😀
    Because facts will prove, guaranteed, what I have been tgelling for years here. that if they continue to show their year on year GDP growth, trade surplus…in US$, Brazil will then have stats showing not a recession……. BUT A DEPRESSION…when the US$ will reverse !!!!!
    But same for most emerging nations, who also cheated as much as Brazil.

    I also bet that very shortly, Bin the Crook will caress his navel once more and say how smart HE (with his gang such as Meireiles) was…..to have accumulated most of the Brazilian foreign currencies…..in US$ !
    But…. both the US$ and the gang of idiots have a long long long long way to go….before they finally just….BREAK EVEN, ON THEIR NOT SO SMART VISION !!!!

    And guess what : Brazilians citizens will again….APPLAUDE….well before the crooks break even !!!!!

    So it was, so it is and so it will be !!!!

    😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀

  • João da Silva

    [quote]Lower Food Price Helps Bring Down Inflation in Brazil[/quote]

    Is it a kind of joke?

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