* Brazil's broadest inflation measure eases to 0.21 pct in
* Annual inflation edges down to 8.06 pct
* Wholesale prices unchanged, but consumer prices soar
SAO PAULO, March 27 The broadest measure of
Brazilian inflation slowed more than expected in March but its
consumer price component accelerated its advance, the private
think tank Fundação Getulio Vargas said on Wednesday.
The IGP-M index -- which encompasses wholesale,
construction costs and consumer prices -- rose 0.21 percent in
March, easing its pace of advance from a 0.29 percent gain in
The index had been expected to rise 0.31 percent, according
to the median forecast of 24 economists polled by Reuters.
The consumer price component, which has a 30 percent
weighting in the index, rose 0.72 percent, compared with a 0.30
percent increase in February.
That suggested the possibility that benchmark IPCA consumer
index inflation could break the central bank's target ceiling
this month and put more pressure on the central bank to raise
interest rates soon. The government's statistics agency is due
to release the IPCA for March on April 10.
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.
In the 12 months through March, the IGP-M index rose 8.06
percent, down from 8.29 percent in the previous month.
The wholesale component of the IGP-M, which accounts for
about 60 percent of the overall index, rose just 0.01 percent in
March, compared with an increase of 0.21 percent in the previous
month. Intermediate goods such as industrial supplies, which are
inputs for factories, dropped 0.28 percent, from a rise of 0.73
percent in February.
The construction costs index, which accounts for the rest of
the IGP-M, climbed 0.28 percent in March after a rise of 0.80
percent in the previous month.
The central bank targets IPCA annual inflation at 4.5
percent, plus or minus two percentage points.
With the prospect of the IPCA index piercing the target
inflation ceiling of 6.5 percent in coming months, most
economists and investors expect the bank led by Alexandre
Tombini to start raising interest rates in May from the current
record low of 7.25 percent.