SAO PAULO (Reuters) - Easing food inflation and a drop in public transport fares in the wake of nationwide protests have likely helped Brazil’s inflation return below the ceiling of an official target, a Reuters poll showed.
The country’s benchmark IPCA-15 consumer price index is seen rising 6.43 percent in the 12-month period through mid-July, below the 6.5 percent ceiling of the government’s target and down from 6.67 percent in mid-June, according to the median of 16 forecasts.
On a monthly basis, inflation was seen rising 0.11 percent, slowing from an increase of 0.38 percent recorded in mid-June, according to the median of 23 forecasts.
National statistics agency IBGE will release the figures on Friday at 9 a.m. local time (1200 GMT). Forecasts for the monthly increase ranged from 0.04 to 0.24 percent, while estimates for the annual rise ranged from 6.32 to 6.50 percent.
A number of Brazilian cities including Rio de Janeiro and Sao Paulo lowered bus and subway fares last month in response to protests that later became massive nationwide demonstrations against poor public services, police violence and graft.
The analysts expected a continued moderation in food and beverage prices. In the month to mid-June, food and beverage inflation slowed markedly to 0.27 percent and rose only 0.04 percent for the calendar month of June, according to the IPCA data.
An extension of this trend is expected to help keep inflation on a downward slope through 2013.
The majority view is that Brazilian inflation peaked last month, with most analysts seeing 12-month inflation below 6 percent by year-end. Most of them also call for at least two more interest rate hikes by the central bank just to ensure that expectations for next year stay under control.
In recent months, stubbornly high inflation has dented consumer confidence, undermining an already fragile economic recovery and eroding President Dilma Rousseff’s high popularity rates. The central bank has raised interest rates three times since April and has pledged to keep increasing them until inflation slows.
Editing by W Simon