* Consumer prices rise 5.75 pct in 12 months through mid-Oct
* Month-on-month inflation rises to 0.48 pct, food prices
By Silvio Cascione
SAO PAULO, Oct 18 (Reuters) - Brazil's annual inflation
slowed less than expected in mid-October as food prices spiked,
in what could boost expectations for a more prolonged cycle of
interest rate hikes by the central bank.
Brazil's IPCA-15 inflation index rose 5.75
percent in the 12 months through mid-October, above the median
forecast of 22 analysts for an increase of 5.69 percent.
Inflation has moderated over the past few months as the
impact of a severe drought in the United States on food prices
late last year fades. In mid-September, annual inflation stood
at 5.93 percent.
In the month to mid-October, the IPCA-15 index rose 0.48
percent, accelerating from an increase of 0.27 percent in
mid-September. Analysts in a Reuters poll expected a 0.41
Food prices jumped 0.70 percent from mid-September, after
edging up a modest 0.04 percent in the previous month, led by
higher prices of beef, poultry, fruits and bread.
The central bank's annual inflation target is 4.5 percent,
with a tolerance band of two percentage points either way.
However, inflation is not expected to ebb to 4.5 percent
anytime over the next two years as infrastructure bottlenecks
and resilient consumer demand keeps upward pressure on prices.
This will probably encourage the central bank to raise
interest rates back to double-digit levels in its next monetary
policy meeting, in November, acoording to a growing number of
Brazil's benchmark interest rate is currently
at 9.50 percent, the highest among the world's largest
economies, after five consecutive increases since April.
Central bank policymakers say they aim to bring 2013
inflation to below the 5.84 percent rise in consumer prices in
2012. The latest forecast in a Reuters poll of 36 economists
predicted 12-month consumer inflation will end this year
slightly above that level, at 5.9 percent.
Below is the result for each price category:
- Food and beverages 0.70 0.04
- Housing 0.67 0.53
- Household articles 0.97 0.52
- Apparel 0.88 0.37
- Transport 0.08 0.30
- Health and personal care 0.35 0.56
- Personal expenses 0.46 0.16
- Education 0.06 0.12
- Communication 0.03 -0.07
- IPCA-15 0.48 0.27
- Budget, Tax & Economy
- Investment & Company Information