Brazil inflation slows in October to 6.59 percent

Brazil’s annual inflation slowed in October but remained above the official target range, according to official data. Consumer prices, as measured by the IPCA index, rose 6.59 percent in the 12 months through October, easing from 6.75 percent in September, government data showed.

On a monthly basis, consumer prices rose 0.42 percent in October, compared with 0.57 percent in September.

A smaller increase in food and transportation prices helped bring down inflation last month, statistics agency IBGE said.

The country’s central bank targets inflation at 4.5 percent for each calendar year with a tolerance margin of 2 percentage points.

However, a government-sponsored fuel price increase announced last week is likely to drive inflation higher this month.

State-controlled oil company Petroleo Brasileiro SA (Petrobras) raised wholesale petrol prices by 3 percent and diesel by 5 percent.

The fuel price hike will add about 0.1 percentage points to inflation, departing Finance Minister Guido Mantega told reporters on Friday.

Analysts estimated that the price increase would likely push inflation close to 6.5 percent by the end of the year, still within the upper limit of the ‘tolerance’ range reserved for emergencies.