Brazilian Economy Outlook
Inflation rates under control
In 2011, consumer inflation in Brazil had two crucial moments. The first one was from January to May, recording a 0.8 percent monthly average. Such pressure came mainly from external sources, such as world commodity price shocks that occurred between late 2010 and early 2011. On the other hand, from May up to December 2011, inflation started to ease down considerably, recording a 0.4 percent monthly average. As a result, annual inflation ended the year within the target, at 6.50 percent.
The declining path has continued in the first quarter of 2012. The 12-month accumulated IPCA (Broad Consumer Price Index) decreased from 7.31% in October 2011 to 5.24% in March 2012. On a monthly basis, the inflation rate for March 2012 was 0.21%, well below market expectations. Moreover, it is worth noting the absence of major pressures on monitored prices this year, notably urban bus fares and household electricity prices, which may help to keep inflation rates at lower levels in 2012. According to the Central Bank of Brazil Inflation Report (March 2012), the outlook for the 2012 IPCA inflation is 4.4%.
________________
Brazilian Economy Outlook
 |  | |  |
