Brazil inflation slows in October as IPCA-15 rises 0.32%

Brazil's IPCA-15, a preliminary inflation indicator, rose by 0.32% in October, a deceleration from the 0.70% recorded in September. The result fell below market expectations, which had projected a median increase of 0.44%.

While the monthly rate slowed, the 12-month accumulated inflation reached 4.62%, exceeding the Central Bank's target ceiling of 4.5%. Food and beverages remained a primary driver of price increases, rising 0.88% in the month, with significant spikes in tomato (24.54%), onion (13.63%), and potato (10.96%) prices.

Conversely, the overall index was tempered by price drops in airfare (-9.24%) and residential electricity (-0.89%). Economists suggest that while the deceleration is positive, the 12-month figure necessitates caution regarding monetary policy, even as it may allow for continued Selic rate cuts.

Separately, the Consumer Confidence Index (ICC) reported by FGV rose by 0.5 points in October to 84.7 points, reversing five consecutive months of decline. However, the index remains in pessimistic territory, with high household debt and delinquency acting as potential constraints on future growth.