April 20, 2018 / 12:51 PM / a year ago

UPDATE 1-Brazil mid-April inflation accelerates, but less than expected

 (Adds details throughout, context)
    By Bruno Federowski
    BRASILIA, April 20 (Reuters) - Brazil's inflation rate
accelerated for the first time this year in mid-April but still
undershot economist expectations, keeping the central bank on
track to cut interest rates to an all-time low next month.
    Consumer prices tracked by the benchmark IPCA index rose
2.80 percent in the 12 months to mid-April, government
statistics agency IBGE said on Friday, slightly below the median
 2.84 percent estimate in a Reuters poll.             
    The reading underscores the central bank's struggles to lift
inflation back to this year's target range of 4.5 percent plus
or minus 1.5 percentage points after missing it for the first
time last year.
    High unemployment and widespread idle capacity, as well as
an unexpectedly long stretch of food deflation, have kept a lid
on price increases this year.
    Food prices rose in mid-April after falling the month
before, suggesting fading downward pressure. The IPCA rose 0.21
percent from the month before, a faster monthly rate than March
but still below a consensus 0.25 percent estimate.             
    But the slow acceleration in inflation may not be enough for
it to end the year at the target's midpoint, allowing the
central bank to extend the deepest rate-cutting cycle in a
decade at its May meeting.
    A central bank survey put 2018 inflation at 3.48 percent,
accelerating to 4.07 percent in 2019.
    Central bank chief Ilan Goldfajn has repeatedly stressed a
plan to cut the benchmark Selic interest rate by another 25
basis points next month and then stand pat as it considers the
economic outlook.

 (Reporting by Bruno Federowski
Editing by Bill Trott)
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