Brazil has been grappling with rising inflation, primarily driven by a substantial increase in air travel costs. The Brazilian Institute of Geography and Statistics (IBGE) recorded a 0.21% rise in consumer prices from mid-September to mid-October, pushing the annual inflation rate to 5.05%, up from 5.0% through mid-September.
Transportation costs, significantly influenced by air fares, have seen an unprecedented surge of 23.75%, following a relatively modest 2.02% rise in the preceding month. This sharp increase is primarily responsible for the uptick in the overall inflation rate.
In contrast, food prices registered their fifth consecutive monthly decline, although at a slower pace than September's 0.77%. The persistent decline in food prices offers a counterbalance to the inflationary pressures exerted by transportation costs.
The Central Bank of Brazil employs two key indices to monitor inflation - the IPCA (IBGE's primary inflation index) and the IPCA 15 (mid-month measure). According to a weekly survey of economists, the IPCA is projected to close the year at 4.65%, suggesting an anticipated easing of inflationary pressures in the coming months.
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