(Adds table, details)
BRASILIA, May 23 Brazil's annual inflation rate
fell below 4 percent in mid-May for the first time in nearly 10
years, leaving the door open for the central bank to cut
interest rates at the end of this month despite growing
Consumer prices rose 3.77 percent in the 12 months through
mid-May, national statistics agency IBGE said on Tuesday. That
was slightly above the median estimate of a 3.74 percent
increase from economists in a Reuters poll.
The inflation rate has plunged from a 12-year peak of 10.7
percent in January 2016 and is now below the government's 4.5
percent target as the worst recession in Brazil's history has
caused widespread unemployment and weak consumer demand.
The IPCA-15 consumer price index rose 0.24
percent in the month to mid-May, up from 0.21 in mid-April.
As inflation eases, the central bank is widely expected to
cut the key Selic interest rate at its next meeting, even as a
major corruption scandal last week put President Michel Temer's
administration on the verge of collapse.
Yields on interest rate futures were down in morning
trading, suggesting traders saw a higher likelihood of a
100-basis-point cut on May 31. The benchmark lending rate is
currently at 11.25 percent.
Below is the result for each price category:
- Food and beverages 0.42 0.31
- Housing 0.15 0.39
- Household articles 0.02 -0.43
- Apparel 0.74 0.44
- Transport -0.40 -0.44
- Health and personal care 0.84 0.91
- Personal expenses 0.27 0.23
- Education 0.05 0.14
- Communication 0.19 0.18
- IPCA-15 0.24 0.21
(Reporting by Silvio Cascione; Editing by Lisa Von Ahn)