BRASILIA Brazil's annual inflation rate in April likely eased to its lowest level in nearly 10 years, which could help prod the central bank to make another steep interest rate cut this month, a Reuters poll showed on Monday.
The IPCA benchmark consumer price index was seen rising 4.10 percent in the 12 months through the end of April compared with a 4.41 percent increase in the year to the middle of the month, according to the median estimate of 26 economists surveyed. The data is due to be released on Wednesday.
Brazilian annual inflation has tumbled from a 12-year peak of 10.7 percent in January 2016 amid slack consumer demand stemming from a severe recession and the highest unemployment on record.
President Michel Temer has hailed the drop in inflation as evidence that his austerity agenda was putting Latin America's largest economy on a solid footing for recovery.
As inflationary pressures have eased, the central bank has steadily cut its benchmark interest rate from 14.25 percent in October.
Last month, it slashed it by 100 basis points, taking it to 11.25 percent. It was the deepest cut to the rate in nearly eight years.
"The (inflation) numbers should strengthen the case for another 100 basis point cut this month," said Leonardo Costa, an economist with the São Paulo-based consultancy Rosenberg & Associados.
On Monday, a central bank survey of economists forecast a central bank interest rate of 8.5 percent and 4 percent annual inflation by December.
In the month of April, consumer prices were expected to have increased 0.16 percent from March, slowing from a 0.25 percent rise in the previous month, according to the median of 28 forecasts in the Reuters poll.
Forecasts for the monthly inflation rate ranged between 0.12 percent and 0.27 percent, while estimates for the 12-month rate varied between 4.07 percent and 4.22 percent.
Housing and transportation prices probably fell in April, while education costs slowed their increase, according to economists in the Reuters poll.
A one-off cut in electricity rates also likely contributed to last month's anticipated inflation slowdown, as the government reversed a tariff surcharge related to the Angra 3 nuclear power plant, economists said. The central bank, however, said last month that this drop, however sizable, should not have relevant implications for monetary policy.
(Reporting by Silvio Cascione Editing by W Simon)