Brazil's Inflation Below Target for the First Time Since 1998

01/11/2018 - 10h02

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FLAVIA LIMA

FROM SÃO PAULO

The inflation in Brazil reached 2.95% in 2017, below the target proposed by the Central Bank (3%) for the first time since the regime was created in 1999.

The target center is 4.5%, with a 1.5% tolerance below or above the figure. This was the lowest level since 1998, when the inflation accumulated along the year reached 1.65%.

The president of the Central Bank, Ilan Goldfajn, had to justify the result in a letter to the Minister of Finance, Henrique Meirelles. Goldfajn said the strong fall in food prices was the main reason for the low figure.

Among the poorest in the country, the inflation measured by the National Consumer Price Index (INPC) reached 2.07%, the lowest level since 1994, when the Real Plan was created.

The INPC calculates price variations for families who earn up to five times the minimum wage and had only reached levels below 3% in two other occasions: 1996 and 2006.

In this group, food prices have more weight than in the general index, which includes family incomes of up to 40 times the minimum wage.

Analysts believe the scenario will hardly be repeated in 2018, which is likely to be close to the target.

Translated by THOMAS MUELLO

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