Banco Central do Brasil's Copom minutes show rising inflation persists

By Marisa Wong

Madison, Wis., March 10 - The Monetary Policy Committee of the Banco Central do Brasil reported rising inflation in the beginning of 2011 over the December period, according to data on the performance of the Brazilian economy released Thursday in the minutes of the committee's March 1-2 meeting.

The committee reported that IPCA inflation reached a record high of 0.63% in December and then increased to 0.83% in January. Inflation for the past 12 months has thus accumulated to 5.99%, or 1.4 points above that observed in the 12 months up to January 2010.

The acceleration in prices seen in 2010, led by market prices in particular, may continue, the committee said in the minutes of the meeting.

Inflation in the services sector is remaining at a high level. Market prices increased 7.26% in the 12 months up to February, compared to 7.22% in January, the committee reported.

The General Price Index inflation, affected by wholesale prices, consumer prices and construction, recorded 0.98% in January, which is much higher than the 0.38% recorded in December.

With respect to core inflation, all measures had higher rates in the trailing 12 months. The cumulative increase was 5.76% for the 12 months through February, compared to 5.72% through January. On a monthly comparison, however, core inflation decelerated. A month-to-month increase of 0.45% was recorded for February, compared to 0.59% in January.

The committee plans to reconvene on April 19 to discuss monetary policy decisions further.

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