Brazilian Consumer Prices Expected To Slow Across March – CoffeeTalk

Brazil’s consumer prices are expected to slow down in March from February due to a moderation in energy costs, but food inflation likely remained high, according to a Reuters poll of economists. Official data is expected to show that consumer prices increased 0.56% last month vs. 1.31% in February, according to the median estimate of 20 economists polled April 2-7. The slowdown is a product of lower electricity tariffs compared to February and will be partially offset by higher food inflation, pushed by eggs and coffee, and air fares.

Domestic egg prices have risen as the U.S. has almost doubled imports from Brazil following a massive cull in the U.S. after a bird flu outbreak sent prices soaring there. Global prices for arabica coffee have gained more than 20% this year on top of a soaring 70% in 2024 as Brazil – producer of nearly half the world’s arabica – suffered one of its worst droughts on record.

The trajectory of food costs in Latin America’s No.1 economy was increasingly worrying consumers and government officials even before Trump’s back-and-forth tariff decisions this month. The causes are a strong labor market, continuous foreign demand for Brazilian commodities, and bad weather, which have countered government measures and the central bank’s ongoing tightening campaign.

Both services and underlying measures of inflation should print around 0.5% on the month in March, for annualized readings above 6%, well above the official inflation target. The goal for Brazil’s headline inflation is 3.0% plus/minus 1.5 percentage points, with the consensus forecast for 2025 being 5.65%.

Read More @ Reuters