April IPCA inflation hits 0.9% MoM, nearing Brazil’s target band ceiling and raising risks of a central bank pause.
Brazil’s April IPCA inflation is projected to rise 0.9% month-over-month, pushing annual inflation to around 4.5%, near or above the central bank’s target band. Energy and food prices are driving the increase, with Middle East tensions and supply constraints amplifying risks.
March data showed firming food inflation, while higher transport and fertilizer costs are expected to broaden price pressures. Core inflation remains subdued due to restrictive real rates, but administrative price adjustments and fiscal measures add upside risks to expectations.
The Brazilian Central Bank is still expected to cut rates cautiously in June, though the likelihood of a pause in the easing cycle has increased amid rising inflation concerns.