Brazil inflation slows to 5.6%
Brazil's annual inflation rate slowed in February, the government said Friday, though a rise in the monthly rate and upward pressure on wages mean price increases remain problematic for President Luiz Inacio Lula da Silva.
The annual inflation rate in Latin America's biggest economy was 5.6%, down from 5.77% in January, said the national statistics institute, IBGE, AFP reported.
The drop, which was driven by a fall in food prices, inches the rate a bit closer to the target of 3.25% set by the central bank, which has aggressively raised interest rates in a bid to rein in surging prices.
But the monthly inflation rate came in at 0.84%, up from 0.53% in January.
"Core inflation pressures remain uncomfortably strong for the central bank, which, coming alongside elevated fiscal risks, mean that rate cuts are not on the cards anytime soon," analyst Kimberley Sperrfechter of consulting firm Capital Economics said in a note.
"Core inflation is likely to stay uncomfortably high, not least because of strong wage pressures."
Veteran leftist Lula, who defeated far-right ex-president Jair Bolsonaro in October promising a return to the economic growth of his first presidency (2003-2010), has publicly sparred with central bank chief Roberto Campos Neto, insisting the bank needs to lower the key interest rate to allow the economy to grow faster.