Brazil's IGP-M inflation paints mixed picture in January

Wed Jan 30, 2013 5:55am EST

Related Topics

* Brazil's broadest inflation measure eases to 0.34 pct month on month

* Annual inflation speeds up to 7.91 pct

* Wholesale food prices drop, offset faster consumer inflation

SAO PAULO, Jan 30 (Reuters) - The broadest measure of Brazilian inflation eased month on month but accelerated on an annual basis in January, leaving the central bank focused on keeping price pressures in check ahead of an expected pick-up in economic growth later this year.

The IGP-M index rose 0.34 percent in January, down from a 0.68 percent gain in December, private think tank Fundação Getulio Vargas said on Wednesday.

The index was expected to rise 0.31 percent, according to the median forecast of 24 economists polled by Reuters.

Estimates ranged from increases of 0.22 percent to 0.40 percent.

In the 12 months through January, the IGP-M index rose 7.91 percent, up from 7.82 percent in the previous month.

Inflation expectations have drifted higher in recent months after Brazil's central bank cut interest rates ten straight times to revive economic growth. {ID:nL1N0AT1FB]

Analysts and investors closely monitor the IGP-M because it provides a broad look at both wholesale and consumer prices in Latin America's largest economy. It also allows investors to watch price trends in the construction industry.

The wholesale component of the IGP-M, which accounts for about 60 percent of the overall index, rose 0.11 percent in January, compared with an increase of 0.73 percent in the previous month.

Soybeans and corn led the decline in wholesale prices. Poultry prices also slowed sharply from December, IGP-M showed.

The consumer price component, which has a 30 percent weighting in the index, rose 0.98 percent, compared with a 0.73 percent increase in December.

Consumer food prices rose 1.97 percent, compared with an increase of 1.29 percent in December.

The construction costs index, which accounts for the rest of the IGP-M, climbed 0.39 percent in January after a rise of 0.29 percent in the previous month.

A release of the IGP-M typically comes ahead of that for Brazil's benchmark IPCA consumer price index. The government's statistics agency is due to release the IPCA for January on Feb. 7.

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