PREVIEW-Brazil inflation seen steady in October

Mon Nov 9, 2009 5:47pm GMT
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* What: Brazil's IPCA consumer price index for October

* When: Wednesday, Nov. 11 at 9 a.m. (1100 GMT)

* Forecast: 0.23 pct inflation in Oct vs 0.24 pct in Sept

By Vanessa Stelzer

SAO PAULO, Nov 9 (Reuters) - Inflation in Brazil likely remained stable in October from the previous month, reinforcing the view that the central bank may not need to raise interest rates any time soon, a Reuters poll showed on Monday.

The median forecast of 30 economists surveyed by Reuters saw the benchmark IPCA consumer price index BRCPI=ECI, which the central bank uses when setting interest rates, rising 0.23 percent after climbing 0.24 percent in September. Estimates in the poll ranged from 0.19 percent to 0.30 percent.

Well-behaved prices among foods, particularly among dairy products and non-processed foods, will not be enough to slow inflation further, said Miriam Tavares, head of foreign exchange at AGK Corretora in Sao Paulo.

That's because of pressure from transportation costs, including seasonal highs among fuels and the gradual return of an industrial tax on automobiles, previously relaxed by the government to boost the economy during recession, she said.

The economists polled expect the IPCA to end 2009 at 4.3 percent, according to the median forecast of 10, with estimates ranging from 4.2 to 4.4 percent.  Continued...

 
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