Brazil's inflation rate fell below five percent in October, officials said Friday, its first decline after three straight jumps, adding to the case for the Central Bank to continue growth-boosting interest-rate cuts.
The annual inflation rate slowed to 4.82 percent last month, down from 5.19 percent in September, said the IBGE national statistics institute.
The rate came in below analyst forecasts, but was still above the Central Bank's target ceiling of 4.75 percent.
However, analysts said the dip meant the Central Bank would likely keep slashing its benchmark interest rate, which left-wing President Luiz Inácio Lula da Silva argues is needed to kickstart Latin America's biggest economy.
The Central Bank, which aggressively raised the interest rate to fight inflation unleashed by the Covid-19 pandemic and then the war in Ukraine, has cut it by half a percentage point at each of its past three meetings.
"Inflation will continue to fall in the coming months, paving the way for further interest rate cuts," consulting firm Capital Economics said in a note.
However, it said "fiscal risks" meant the bank would likely remain cautious, after Lula caused market jitters last month when he said his government was unlikely to hit its target of bringing the deficit to zero next year.
The monthly inflation rate came in at 0.24 percent.
– AFP
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