Brazil April inflation hits 26-year high

Brazil’s inflation rate hit a 26-year high in April, according to the government, as spiraling prices defied the central bank’s efforts to control them.

According to the IBGE, inflation in the 12 months to April was 12.13 percent, the highest since 2003 and well above the central bank’s target of 3.5 percent.

The rate for April came in at 1.06 percent, the highest for the month since 1996, IBGE said.

That was worse than the forecast of one percent by analysts polled by business daily Valor.

Food prices were the main inflation driver in April, rising more than two percent.

Fuel prices remained an underlying factor, up more than 33 percent in the past year.

“The strength of price pressures is likely to keep policymakers at the central bank concerned,” William Jackson, chief emerging markets economist at consulting firm Capital Economics, said in a note.

Brazil’s central bank has been on one of the most aggressive monetary tightening cycles in the world, rapidly hiking the key interest rate from two percent in March 2021 to 12.75 percent currently.

However, inflation has remained stubbornly high, weighing on Brazilians’ wallets – and President Jair Bolsonaro’s popularity as he prepares to run for reelection in October, trailing leftist ex-president Luiz Inacio Lula da Silva (2003-2010) in the polls.