By Benjamin Tavener
SAO PAULO
Inflation in Brazil rose 6.41 percent in 2014, up markedly on 2013 but still within the state’s target range, the government's office for national statistics, the IBGE, reported Friday.
The benchmark IPCA consumer price index accelerated to 0.78 percent in December from 0.51 percent in November, the steepest jump in inflation in nine months.
The IBGE said that, of the nine groups of products and services surveyed, transport had witnessed the biggest rise in prices, pushing up December's monthly result.
The annualized rate of inflation had stood at 6.56 percent a month earlier, but the year-end figure showed inflation had fallen back within the government's target for inflation – 4.5 percent with a tolerance margin of two percentage points.
However, annual inflation was up significantly on the annualized rate of 5.91% seen in 2013.
The central bank has raised the key SELIC interest rate to keep inflation in check, but the most recent survey of market analysts by the bank has forecast higher inflation in 2015.
The bank's latest weekly Focus bulletin predicted the current year would end with inflation running at 6.56 percent – breaching the upper ceiling of the government target.
Analysts say that, while essential to regaining confidence from international investors, plans by Brazil's new finance minister, Joaquim Levy, to foster growth in the economy, including by cutting government spending and increasing state-regulated prices, could combine with the current weaker performance by the Brazilian real to push price rises further this year.
The Focus survey further predicted that the real would continue to fall against the U.S. dollar in 2015 – to around R$2.80. The dollar rate stood at R$2.66 at 11 a.m. in São Paulo on Friday.
The economists surveyed also cut their GDP forecast for 2015 to 0.5 percent, and updated their 2014 growth prediction to 0.15 percent. Official GDP figures for 2014 are expected by March.
