Brazil's annual inflation rate fell in April to its lowest level in nearly 10 years, data showed on Wednesday, bolstering the case for another steep interest rate cut by the central bank later this month.
Consumer prices rose 4.08 percent in the 12 months through April, slightly below market forecasts for a 4.10 percent increase and compared with a rise of 4.57 percent in the previous month, national statistics bureau IBGE said.
It is the lowest inflation rate in Brazil since July 2007, below an official target of 4.5 percent.
Prices edged up 0.14 percent on a monthly basis, easing from a rise of 0.25 percent in March, IBGE said.
Inflation tumbled rapidly from a 12-year peak of 10.7 percent in January 2016 as the worst recession in Brazil's history caused massive unemployment and reduced consumer demand.
President Michel Temer has hailed the drop in inflation as evidence that his austerity agenda was being successful. As price pressures eased, the central bank has started a long cycle of interest rate cuts that is expected to boost economic growth by bringing the benchmark lending rate from 14.25 percent last year to 8.5 percent by December.
The bank slashed rates by 100 basis points last month, the deepest cut to the rate in nearly eight years, to 11.25 percent. Most economists expect the bank to cut rates by another 100 basis points at its next meeting on May 31, but there are growing expectations for an even bolder cut of 125 basis points.
Source: Reuters
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