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LatinNews Daily - 11 September 2024

In brief: Brazil registers monthly deflation in August

*Brazil’s national statistics institute (Ibge) has released the consumer price index (Ipca) for August, which showed monthly deflation of 0.02%. The last month to register deflation was June 2023. The accumulated inflation rate in the 12 months until August 2024 came to 4.24%, down from 4.50% in the 12 months until July. Of the nine categories of products and services measured for the Ipca, only two registered a monthly drop in prices in August – food and drink (-0.44%) and housing (-0.51%). In a press release, the Ibge highlighted that deflation in the housing category was mainly driven by a monthly drop in household energy bills due to a decision by the federal electricity regulator (Aneel) to slash additional tariffs on electricity consumption in August. However, according to economists cited in the press, Aneel’s decision was only a temporary relief and is unlikely to reverse the trend of rising inflation in Brazil, as adverse climate conditions are expected to continue hindering Brazil’s agricultural sector and hydroelectric production, potentially driving up food prices and energy bills again in the coming months.

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