Brazil: annual inflation dropped to 4.44% and returns to the target
WHAT HAPPENED
Brazil's inflation dropped from 4.64% to 4.44% annually in July and returned to the range allowed by the Central Bank. Food prices fell by 0.67%, although housing rose by 0.99% due to electricity.
WHY IT MATTERS
The drop means that prices are still increasing, but more slowly: something that cost 100 reais a year ago now costs 104.44. Food helped to curb the index, while electricity pressured household spending.
AND FOR YOUR PORTFOLIO
With inflation within the allowed range, the Central Bank has more room to continue reducing its rate, which has already dropped to 14%. This could gradually ease loans, mortgages, and credit cards, although electricity still raises bills.
💬 TELL IT LIKE THIS
“Brazil is not seeing lower prices overall: it is seeing prices rise more slowly, and that opens the door to cheaper credit.”