MNI BRIEF: Brazil’s 2025 Inflation 4.26%, Within Target Range

Brazil’s IPCA inflation was 4.26% in December, the Brazilian Institute of Geography and Statistics (IBGE) said Friday, reporting a number in line with consensus and down from 4.46% in November.

On a monthly basis, consumer prices rose 0.33%, compared with 0.18% in the previous month, driven by higher airfares.

“This was the lowest result for a December since 2018 (0.15%),” the IBGE said.

Inflation closed 2025 within the Central Bank of Brazil’s 3% central target range, which allows for a deviation of 1.5 percentage points in either direction, which could boost expectations that the rate-cutting cycle could start soon.

"The 2025 result was mainly driven by the Housing group, which accelerated from 3.06% in 2024 to 6.79%, registering the largest impact (1.02 percentage points) on the annual total. In the previous year, the impact had been 0.47 percentage points," IBGE mentioned. 

Last month, the BCB kept its Selic rate on hold at 15.00%. (See MNI INTERVIEW: BCB To Hold Until March, Fiscal Policy Key)