Rio de Janeiro (AFP) - Brazil's inflation rate hit a seven-year high for the month of February, the government said Friday, as hefty fuel-price hikes took effect that will only exacerbate surging prices, a sore spot for President Jair Bolsonaro.
The monthly inflation rate for February in Latin America's biggest economy came in at 1.01 percent compared to January.This was the highest for the month of February since 2015, said national statistics institute IBGE.
The annual inflation rate rose 0.16 point to 10.54 percent, it said.
That remains far above the central bank's target of 3.5 percent, defying the bank's efforts to rein in prices with one of the most aggressive series of interest-rate hikes in the world.
With the Russia-Ukraine war now pushing prices even higher worldwide, Brazil's inflation problem is only expected to get worse -- especially after state-run oil company Petrobras announced it would hike gasoline prices by 19 percent and diesel by 25 percent from Friday over the fallout of the Ukraine crisis.
"Higher fuel prices are likely to push the headline (inflation) rate up even further in March, to above 11 percent," William Jackson, chief emerging markets economist at Capital Economics, said in a note.
"While the central bank's monetary policy committee hinted at its last meeting that the tightening cycle was nearing an end, the worsening inflation outlook is likely to keep it in a hawkish mood."
Brazil's central bank has raised the key interest rate from an all-time low of two percent in March 2021 to 10.75 percent currently.
But the massive hikes have yet to bring down soaring prices, which are hurting Brazilians' wallets and Bolsonaro's popularity as he fights an uphill battle to win reelection in October against leftist ex-president Luiz Inacio Lula da Silva, his likely opponent, who currently leads in the polls.
