Rising food prices and bus fares pushed Brazil's annual inflation rate to a 12-year high in mid-January, despite a severe recession which has cost more than 1.5 million jobs. Consumer prices as measured by the IPCA-15 index rose 10.74 percent in the 12 months through mid-January, up from 10.71 percent to mid-December and in line with market expectations, government data showed on Friday.
Brazil is set to have both the worst recession and the third-highest inflation rate among G20 economies in 2016, according to Reuters Polls. The government, whose popularity has sunk to near record lows, has sent erratic signals about economic policy, stoking market volatility.
On a monthly basis, prices rose 0.92 percent to mid-January, down from 1.18 to mid-December. Food prices jumped 2 percent in the month to mid-January as a strong El Nino sent heavy rainfall to many southern Brazilian states, raising the cost of carrots, tomatoes and onions by more than 15 percent. Bus fares also rose in many cities, including Sao Paulo and Olympic host Rio de Janeiro. The increase has fuelled violent street protests, although in a smaller scale than in 2013.
Adding to the unease, Brazil's economy shed a net 1.54 million payroll jobs in 2015, the Labour Ministry said on Thursday. Brazil's inflation soared last year after President Dilma Rousseff increased taxes, energy fares and fuel prices to avert a budget crisis and prop up embattled state-controlled oil producer Petrobras. Most Brazilians have endured bouts of hyperinflation until the creation of the real currency in 1994.
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