MNI BRIEF: Brazil's Inflation 5.23% In July, Below Consensus

Brazil's IPCA inflation was 5.23% in July, below the 5.33% consensus and down from 5.35% in June, the Brazilian Institute of Geography and Statistics (IBGE) said Tuesday.

The increase was driven mainly by energy costs. Inflation has remained above the upper limit of the Central Bank of Brazil's 3% target range, which allows for a deviation of 1.5 percentage points in either direction. The BCB kept its Selic rate on hold at 15.00% last month. (See MNI INTERVIEW: BCB To Hold Rates Until Q1 2026 - Le Grazie)

On a monthly basis, inflation was 0.24%, unchanged from the previous month and also below the 0.36% consensus. 

"From January to July, residential electricity rose 10.18%, standing out as the main individual impact (0.39 percentage points) on the IPCA’s cumulative result (3.26%). This 10.18% increase is the largest for the January-to-July period since 2018, when the cumulative rise was 13.78%," IBGE said.