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Brazil Consumer Prices Fall In August According To The IGP-M Index

Source: http://brazileconomy.blogspot.com/2008/08/brazil-consumer-prices-fall-in-august.html
Posted on Wednesday, August 27th, 2008 | In Brazil
Contributed by: Edward Hugh (http://globaleconomydoesmatter.blogspot.com) -

Brazil’s broadest measure of inflation fell in August for the first time in more than two years, led by a larger-than-forecast drop in food prices. Consumer, construction and wholesale prices, as measured by the IGP-M price index, decreased 0.32 percent when compared with July.

The country’s benchmark index for consumer prices showed a 6.23 percent increase for the 12 months through mid-August, the central bank said last week.

Today’s report obviously doesn’t mean that the central bank should ease up on its bid to contain inflation by raising interest rates, but it is, nonetheless, welcome news. Policy makers have raised interest rates three times since April, to 13 percent from a record low 11.25 percent, to slow inflation running near the 6.5 percent upper limit of its target range.

Policy makers, led by bank President Henrique Meirelles, are still expected to raise the key rate 0.75 percentage point for the second consecutive time at their Sept. 10 meeting, and the rate may yet reach 14.75 percent by the end of the year according to the consensus view.

A 30 percent monthly drop in the wholesale price of tomatoes led all food items lower, helping reverse a 1.76 percent increase in the IGP-M in July. The index is measured by the Rio de Janeiro-based Getulio Vargas Foundation.

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About Edward Hugh (http://globaleconomydoesmatter.blogspot.com)
Edward Hugh is a macro economist, who specializes in growth and productivity theory, demographic processes and their impact on macro performance, and the underlying dynamics of migration flows.

Hugh is a founding member and regular contributor to a number of economics weblogs, including Global Economy Matters, Demography Matters and a number of others.

Edward 'the bonobo' Hugh is a Catalan economist of British extraction based in Barcelona. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again". He is currently working on a book with the provisional working title "Population, the Ultimate Non-renewable Resource".

Edward also writes regularly for the demography blog Demography Matters. He also contributes to the Indian Economy blog . His personal weblog is Bonobo Land . Edward's website can be found at EdwardHugh.net.

Edward follows in detail the Indian, Italian, Spanish, German and Japanese economies. He also has a more than a passing interest in the economies of Turkey and Brazil and in the emerging economies of Eastern Europe.

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