Inflation in Brazil Hits Double Digits after The Highest Increase in 21 Years, Driven by Gasoline

National Consumer Price Index rises 0.87% in August and 9.68% in 12 months

The country's official inflation, measured by the Broad National Consumer Price Index, reached the highest rate for August (0.87%) in 21 years and, with the result, reached double digits in the accumulated 12 months ( 9.68%). This is according to the data released by the IBGE (Brazilian Institute of Geography and Statistics) on Thursday.

In the view of economists, the picture reflects a greater diffusion of price increases among sectors of the economy. Financial market analysts still avoid talking about uncontrolled inflation, but they started to raise their projections for the IPCA both in 2021 and in 2022.

All of this occurs at a time when Brazil is experiencing a prolonged water crisis, which makes electricity bills more expensive, and an intensification of political tension, which impacts the exchange rate.

According to the IBGE, the 0.87% increase in August is the highest for the IPCA since 2000. The result, associated mainly with the increase in gasoline, came after an even stronger advance in July, of 0.96%.​

Translated by Kiratiana Freelon

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