(Adds chart, comment)
BRASILIA, April 27 (Reuters) – Brazilian consumer inflation rose above 6% in the month to mid-April for the first time in more than four years, figures showed on Tuesday, likely setting the seal on another punchy interest rate increase from the central bank next week.
The IPCA-15 annual price index rose to 6.17% from 5.52% in the month before, statistics agency IBGE said, once again driven by rising transportation costs and fuel prices in particular.
That was almost exactly in line with the 6.25% median forecast in a Reuters poll of economists, and was the highest level since December 2016, IBGE figures showed.
“Monetary policy normalization is in order. Overall inflation is not out of control but recent dynamics, including rising inflation expectations and the large increase in fuel prices, require close monitoring,” said Alberto Ramos, head of Latin American research at Goldman Sachs.
Central bank chief Roberto Campos Neto has said that unless something “extraordinary” happens, the benchmark Selic rate will be raised by 75 basis points for a second time to 3.50% on May 5.
The central bank’s year-end inflation goal is 3.75% with a margin of error of 1.5 percentage point on either side. The bank’s latest weekly ‘FOCUS’ survey of economists on Monday showed the average 2021 inflation outlook rose to 5% for the first time.
On a monthly basis, mid-month consumer price inflation in April slowed to 0.6% from 0.93% the month before, slightly below the Reuters poll forecast of 0.68%.
Prices rose in seven of the nine groups of goods and services covered by IBGE. Transport costs, including fuel, rose 1.76% in the month, accounting for more than half of the overall monthly increase, IBGE said.
Within that segment, fuel prices rose 4.9% on the month, less than half the rate of the previous month. Gas prices rose 5.5%, again around half the rate of the previous month but the 10th consecutive increase.
Fuel prices are up 28% on a year-on-year basis.
Reporting by Jamie McGeever Editing by Bernadette Baum and Paul Simao
