Brazil’s Mid-September Inflation Rises to 4.47%, Exceeding Forecasts

• Brazil’s annual inflation rate rose to 4.47% in the period to mid-September 2026, up from 4.24% a month earlier and above both the central bank’s 3.00% inflation target and the 4.30% median estimate of economists polled by Reuters, according to the Brazilian Institute of Geography and Statistics (IBGE).
• On a monthly basis, consumer prices increased by 0.70%, reversing a 0.40% decline in mid-August 2026 and exceeding the 0.53% median forecast. Housing costs were the main driver, rising by 2.07% as electricity prices moved higher, while food and beverage prices rose by 0.4%. Annual inflation remained within the central bank’s target range of 3.0%, plus or minus 1.5 percentage points.
• Earlier this month, the central bank lowered the benchmark Selic rate by 25 basis points to 13.75%, its fifth consecutive cut, citing signs of an economic slowdown. At that meeting, the bank kept its options open ahead of next month’s presidential election, in which inflation has become a central campaign issue as leftist President Luiz Inacio Lula da Silva seeks re-election in a tight race against right-wing Senator Flavio Bolsonaro.
• The stronger-than-expected reading adds to concerns about persistent price pressures as the central bank weighs its next steps.

(Source: Reuters)