Brazil’s inflation is at its highest level in 7 years

Inflation in Brazil rose to its highest level in seven years on Monday despite aggressive monetary tightening by the central bank, according to government data reported by Reuters. 

Over the past year, inflation has climbed to 10.79 percent, higher than the forecast of a Reuters poll that placed it at 10.69 percent. 

Central bank chief Roberto Campos Neto said inflation is a “little higher” than expected but should peak in April. Influenced by Russia’s invasion of Ukraine, the figure is beyond the central bank’s year-end target of 3.5 percent. 

Brazil’s consumer price index also increased 0.95 percent in Mach, above the median forecast of 0.87 percent. In March, consumer prices slightly dropped from February’s figures, which were around 10.79 percent. 

Brazil has experienced a lack of rain in the southern part of the country. However, at the same time, the northern region has seen excessive amounts of rain. Both phenomena have reduced the supply of crops and have increased prices. 

Food prices increased by 1.95 percent in the last month and 10.77 percent over the past year, reported Brazil’s Institute of Geography and Statistics (IBGE). Additionally, transportation increased 0.87 percent compared to February, and the price of gasoline rose by 0.83 percent. 

As Brazil struggles to handle the rapid increase of prices, the country’s central bank raised the benchmark interest rate by 100 points to 11.75 percent earlier in March. In March of last year, the benchmark rate was at a record low of 2 percent.