Brazil Consumer Prices Expected To Have Remained Subdued In March

• Brazil's consumer price increases are likely to have remained subdued in March, but some services continued to show worrying increases, leading economists to expect quicker disinflation to come from food and other goods, a Reuters poll showed.
• Last month, the annual variation of the headline IPCA index likely dropped closer to the midpoint of the wider official target for 2024 of 3% plus/minus 1.5 percentage points as a previous seasonal jump in education costs faded.
• It is forecast to register a 4.01% yearly rate and a monthly rate of 0.25% in March, against 4.5% and 0.83%, respectively in February, according to median estimates of 23 economists polled over April 3-9.
• "We are noting an expected increase in underlying services (0.50%) that continues to be a source of risk and should only start to slow down from April onwards," said Banco Santander economist Adriano Valladao P. Ribeiro.
• "Despite this, most core inflation measures are expected to improve in March, and in particular, we are projecting an increase of just 0.23% month on month for the average of the five main core readings.", noted Ribeiro.
• Much will also depend on the Brazilian real's resistance to the threat of higher currency volatility and the potential hit on consumer prices after the real fell to its lowest since October last week on growing doubts over future monetary policy.

(Source: Reuters)