Brazil’s monthly inflation rate dipped in February to 0.33 percent from 0.38 percent the previous month in a trend likely to continue for months to come, the Brazilian Census Bureau (IBGE) said Friday. The 12-month inflation rate fell from 5.35 percent as of January to 4.76 percent as of February. Inflation in February was led by annual hikes in health and education fees. Those hikes tend to be one-off affairs and are unlikely to affect inflation for the rest of the year; meanwhile, food prices fell by 0.45 percent. That trend is likely to continue as a record grain and oilseeds crop comes on stream in March and April. Brazil’s inflation target for 2017 is 4.5 percent, but most economists are already revising their forecasts to focus on inflation of 3.5 percent to 4.0 percent. Friday’s dip in inflation lends strength to ideas the Central Bank may accelerate interest rate cuts. The bank has already trimmed its base rate from 14.25 percent to 12.25 percent. Economists are predicting a base rate in single digits by the end of the year.
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