Brazil's headline inflation accelerated to an annual 5.17pc in September, driven by an increase in power tariffs and motor fuels, according to national statistics agency IBGE.
Annualized inflation accelerated from 5.13pc in August, but remains lower than 5.23pc in July and 5.35pc in June. On a monthly basis, inflation accelerated to 0.48pc from a 0.11pc contraction in August.
Housing costs accelerated to 6.24pc in September from 5.03pc a month prior. Domestic power consumption costs jumped by 10.64pc from 5.68pc in August because of the end of the Itaipu federal discount last month. Brazil was also under its highest power tariff surcharge in September thanks to unfavorable weather conditions hampering power generation, which mostly comes from hydroelectric plants.
Transportation costs decelerated to an annualized 3.18pc from 3.31pc in August, despite motor fuel costs increasing by 2.21pc from 1.31pc a month prior. Costs of gasoline increased by 2.05pc from 1.18pc, while those for ethanol increased by 4.12pc from 2.6pc and for diesel increased by 2.38pc from 1.87pc.
Costs of compressed natural gas contracted by 4.22pc , compared with a a 3pc contraction in August. Airplane ticket costs contracted by 7.03pc from an annual 0.12pc increase.
Food and beverages costs decelerated to 6.61pc from a 7.42pc increase in August. Soybean oil costs slightly accelerated to 17.91pc from 17.87pc in August.
Brazil's target interest rate remained at 15pc in September. The central bank will likely keep it steady through the end of 2025 to push inflation closer to the government's 4.5pc ceiling goal.
Brazil's inflation is set to go under that mark by the end of the first quarter of 2026, the bank said.
