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Brazil's inflation rate soaring to 13-year high

Xinhua, January 9, 2016 Adjust font size:

Brazil's IBGE statistics agency announced Friday that the country's official inflation index, IPCA, reached 10.67 percent in 2015, the highest since 2002.

The rate is way above the inflation target set for 2015, namely 4.5 percent with a two-point tolerance, meaning that the rate should not have exceeded 6.5 percent. The rate also shows significant increase from 2014, when the annual IPCA was 6.41 percent, still below the target's upper limit.

The IPCA rate measures inflation in Brazil's 13 major urban areas. The inflation rate was above 10 percent in seven of them last year. Curitiba, capital of Parana state, registered the highest rate at 12.58 percent, while Belo Horizonte, capital of MInas Gerais state, recorded the lowest at 9.22 percent.

According to IBGE, the inflation rate was significantly impacted by the rise in prices of housing, which reached 18.3 percent. Food and transportation prices had a significant contribution, which had increased 12 and 10.1 percent last year, respectively. Electricity tariffs also rose sharply in the year.

Brazil faced a raft of economic difficulties in the past year. In addition to the higher inflation rate, its gross domestic product is thought to have contracted by 3 percent and many of the country's top political and business figures are embroiled in a broad corruption scandal. Endit