UPDATE 1-Brazil's annual inflation slows slightly in November

Fri Dec 6, 2013 6:31am EST

* Consumer prices rise 5.77 pct in 12 months through
November
    * Prices of rice and beans drop from October


    By Silvio Cascione
    SAO PAULO, Dec 6 (Reuters) - Brazil's annual inflation
cooled slightly in November as food costs slowed, suggesting
easing price pressures that could pave the way for smaller rate
increases by the central bank. 
    Brazil's benchmark IPCA consumer price index 
rose 5.77 percent in the 12 months through November, from 5.84
percent in the prior month, statistics agency IBGE said.
    The central bank targets inflation at 4.5 percent, with a
tolerance margin of 2 percentage points.
    On a monthly basis, the IPCA index rose 0.54
percent, below the 0.58 percent median forecast of 29 economists
in a Reuters poll.
    Overall food prices rose 0.56 percent from October, down
from an increase of 1.03 percent in the previous month. Prices
of rice and beans, Brazil's most basic staples, dropped 1.04 and
7.96 percent respectively.
    Consumer prices have failed to slow substantially even as
Brazil's economy contracted in the third quarter for the first
time in four years. Economists expect inflation above the center
of the official target until at least the end of 2017.
    Still, the central bank has suggested in the minutes of its
latest policy minutes that it could reduce the pace of rate
hikes after six consecutive increases. Brazil's benchmark
lending rate is currently at 10 percent, the highest among the
world's major economies. 
    Stubborn inflation is just one of the problems facing
President Dilma Rousseff, who has also seen her policies of tax
subsidies and credit incentives criticized by investors for
eroding Brazil's public accounts.
    Below is the result for each price category:     
    
                               November    October
 - Food and beverages                0.56        1.03
 - Housing                           0.69        0.56
 - Household articles                0.38        0.81
 - Apparel                           0.85        1.13
 - Transport                         0.36        0.17
 - Health and personal care          0.41        0.39
 - Personal expenses                 0.87        0.43
 - Education                         0.08        0.09
 - Communication                     0.40        0.08
                                                     
 - IPCA                              0.54        0.57
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