Brazilian inflation falls to 8-year low of 3.14 pct in 2006

15 January 2007

Sao Paulo, Brazil, 15 Jan – Inflation in Brazil fell to 3.14 percent last year, almost half the 2005 rate and the lowest in the last eight years, according to official figures.

Figures published by the Brazilian Institute of Geography and Statistics (IBGE) showed that the consumer price index in 2006 had bettered the government target of 4.5 percent.

The valuation of the Brazilian currency against the US dollar, the availability of agricultural products and lower rises in public tariffs were responsible for reduced inflation last year, the IBGE said.

Since the official inflation targets system was adopted by the Brazilian government in 1999, the annual target had been reached five times, but this is the first time that results out-performed expectations.

For 2007 the Brazilian government has also set a target of 4.5 percent, but analysts believe that prices rises will not exceed 4 percent.

With the CPI at 3.14 percent in 2006, Brazil is has the third lowest inflation amongst Latin American countries, after Peru (2.4 percent) and Panama (2.8 percent). (macauhub)