Brazil‘s inflation came above expectations with the sharpest rise for March in 28 years, official figures showed on Friday, as higher fuel prices weighed on the economy, affected by an oil shock in the wake of the Ukraine conflict.
The IPCA consumer price index rose 1.62% from February, government statistics agency IBGE said, above a 1.3% gain seen in a Reuters poll of economists and accelerating from the February 1.01% figure.
In the 12 months through March, inflation grew 11.30%, up from 10.54% in the prior month and well above the central bank’s year-end target of 3.5%.
According to the IBGE, eight of the nine groups of products and services surveyed rose in March, with emphasis on transport, up 3.02% over the previous month, and food and beverages, which grew 2.42%.
The two groups alone contributed with almost three quarters of the month’s inflation, IBGE added.
It also pointed out that the result in transport was affected by the 6.7% rise in fuel prices. Gasoline, in particular, was up 6.95%.
In mid-March, the state-run oil firm Petrobras announced a big increase in fuels to track global markets after Russia’s invasion of Ukraine prompted oil prices to skyrocket.
Brazil‘s central bank chief Roberto Campos Neto said inflation would peak in April.
To tame the persistent rise in consumer prices, policymakers have put the country’s benchmark interest at 11.75% from a record-low of 2% last March, signaling another 100 basis-point hike in May. That could wrap up the aggressive tightening cycle, which may be a big hurdle for economic growth this year.