March 25, 2020 / 12:34 PM / 10 days ago

UPDATE 1-Brazil mid-March inflation evaporates as air travel costs plunge

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By Jamie McGeever

BRASILIA, March 25 (Reuters) - Brazilian inflation virtually evaporated in March, according to a mid-month measure of consumer prices released on Wednesday, as a steep fall in the cost of air travel pushed monthly inflation to its lowest level for any March since 1994.

Government statistics agency IBGE did not make any specific reference to the coronavirus outbreak in its report, but the 16.9% fall in the cost of air travel in the month to mid-March suggests it was likely a factor.

The monthly rate of Brazil’s IPCA-15 consumer price inflation in the month to mid-March fell to 0.02% from 0.22% a month earlier, the lowest rate since the “Real Plan” was launched in 1994 to end the country’s history of hyperinflation.

That was less than the 0.06% median estimate in a Reuters poll of economists, and helped reduce the annual rate of inflation to 3.67% from 4.21% in February, also slightly below forecasts.

The accumulated rate of inflation so far this year is 0.95%, IBGE said.

Of the nine groups of goods and services surveyed, four registered outright deflation in March from the month before, IBGE said. Transport prices fell 0.8%, contributing -0.17 percentage points to the overall monthly rate of inflation, while housing costs fell 0.28%.

Within the transport segment, air travel prices fell 16.9%, IBGE said. That was the third month in a row they have fallen, following declines of more than 6% in January and February.

IBGE said the data for next month’s survey will be collected online and via telephone due to the coronavirus. (Reporting by Jamie McGeever Editing by Chizu Nomiyama)

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