Brazilian cumulative inflation for 2017 amounted to 2.95% compared to 6.29% in 2016. This is the lowest level since 1998 and under the central bank’s target. Nevertheless, in the last month of the year, the consumer price index in the country rose by 2.95% yoy, following an increase of 2.8% in the previous month. Data exceeded market expectations to keep inflation at 2.8%, reaching the highest inflation rate in the last six months.
The inflation in the country is far from the pace in early 2016 when the consumer price index reaches a 13-year high. Despite the faster-than-expected increase in gross domestic product last year, the double-digit unemployment rates and incomplete business capacity of the business kept the trend of rising prices.
On the other hand, the food prices rose in December for the first time since April, as good agricultural crops have seen declines in the rest of the months. And services such as education and health care meanwhile have risen by more than 6% last year.
Brazil’s President Michel Temer has set himself the goal of drafting a bill to cut social security spending before the October presidential election, but much of the budget cuts will have to be made by his successor.