By Samantha Pearson
SÃO PAULO–Brazil’s annual inflation rate accelerated through mid-November as the prices of meat, rice and other household essentials climbed, raising pressure on the country’s poor.
Consumer prices rose 4.22% in the 12 months through mid-November, after rising 3.52% in the 12 months through mid-October, Brazil’s Institute of Geography and Statistics, or IBGE, said Tuesday.
The annual rate rose even as consumer prices increased at a slower pace than the previous month, rising 0.81% in the period from Oct. 14 through Nov. 12. In the previous month to mid-October, prices had risen 0.94%, the fastest pace for the month in 18 years.
Food prices in South America’s largest country have surged over recent months as strong demand from abroad and Brazil’s weak currency have encouraged farmers to export more of their produce, reducing domestic supply.
The surging price of rice, one of Brazil’s most important staples, has concerned President Jair Bolsonaro as the ex-army captain struggles to hang on to the support of poorer voters during the Covid-19 pandemic.
In September, Mr. Bolsonaro asked grocery stores to show some patriotism by keeping their profit margins as narrow as possible, while the head of the country’s association for supermarkets has called on Brazilians to eat more pasta instead.
“We have observed a strong increase in several commodities prices recently, which has negatively impacted some products: rice, beef, oil and milk were the most affected items in the past two months,” said Flavio Serrano, chief economist at the Haitong investment bank in Brazil.
Brazil’s central bank has said previously that it views the rise in food prices as temporary. The central bank has kept the interest rate at an all-time low of 2% since August, helping to spur investment as the economy struggles through the pandemic.
Mr. Serrano said the central bank would likely only increase rates later next year. However, policy makers may decide to act sooner if concerns deepen over Brazil’s fiscal situation, he said.
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(END) Dow Jones Newswires