Brazil's 2021 Inflation Highest Since 2015, Missing Target

Annual inflation in Brazil ended 2021 at a six-year high of 10.06%, government data showed on Tuesday, well above the upper limit of the central bank's year-end target range due to surging fuel and energy prices, Reuters reported. Despite slowing from the 12 months through November, when it reached 10.74%, the rise in the benchmark IPCA consumer price index was the most for a calendar year since 2015, said IBGE, while slightly exceeding the 9.97% median forecast in a Reuters poll of economists. The index rose 0.73% in December alone, IBGE said, above the 0.65% forecast in a Reuters poll, mostly driven by clothing, which grew 2.06%. The full 2021 print missed both the central bank's year-end target of 3.75% and the 5.25% limit of its tolerance range. By law, Brazilian central bank chief Roberto Campos Neto will have to write an open letter explaining why policymakers missed the target's tolerance margin. It is the sixth time it happened since the current inflation-targeting regime was created in 1999, the previous being in 2017. Read more.
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