Forecast inflation accelerates to 1.05% in December, highest rate for month since 2015

The National Broad Consumer Price Index 15 (IPCA-15), which is a preview of the country's official inflation, stood at 1.05% in December, showing strong acceleration compared to the 0.14% rate recorded in November, according to released on Friday (20) the Institute Brazilian Geography and Statistics (IBGE). Meat prices soared 17.71% The price of meat swelled 17.71% in December, representing the highest individual impact on the index of the month (0.48 p.p.), almost half of inflation for the month. Of the 9 groups of products and services surveyed, only that of "residence articles" presented deflation (-0.84%) in December. The highest increase was in the "food and beverage" group, which advanced 2.59%. In addition to meats, other highlights were the carioca bean (20.38%) and fruits (1.67%). Inflation outlook and target This year's central inflation target is 4.25%, and the tolerance range ranges from 2.75% to 5.75%. To achieve it, the Central Bank raises or reduces the basic interest rate of the economy (Selic), which is currently at 4.5% per year – historical low. Analysts at financial institutions project inflation of 3.86% in the year, according to the Central Bank's latest Focus survey. In 2018, inflation was 3.75%. For 2020, inflation is forecast of 3.60%. Next year, the central inflation target is 4% and will have been officially met if the IPCA fluctuates between 2.5% and 5.5%.