Brazil’S Inflation Hits 4.83% In 2024, Exceeding Central Bank Target

2025-01-10 03:16:45

(MENAFN- The Rio Times) Brazil's inflation, measured by the Broad National Consumer Price index (IPCA), reached 4.83% in 2024, surpassing the Central Bank's 4.5% target ceiling.

This marks the eighth breach of inflation targets since 1999, as December's 0.52% increase cemented a year of accelerating prices in Latin America's largest economy.

Key sectors driving inflation included food and beverages, which rose by 7.63%, and transportation, which increased by 3.11%. Personal expenses also accelerated to 4.98%.

The Brazilian real's 27.36% depreciation against the dollar significantly impacted import costs and overall price levels throughout the year. Looking ahead to 2025, major financial institutions project continued pressure.

XP Investimentos forecasts 6.1% inflation, while Bradesco BBI projects 5.8%. The Central Bank has responded by raising the Selic rate to 12.25%, with expectations of reaching 14.25% by March 2025.

Under the new continuous inflatio targeting system starting in 2025, Brazil sets a 3% center target with a 1.5% to 4.5% tolerance interval.

The Central Bank, led by Gabriel Galípolo, faces the crucial task of re-anchoring inflation expectations. It must also bring prices back within the target range to maintain economic stability.

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