June 21, 2013 / 12:35 PM / in 5 years

UPDATE 1-Brazil inflation surpasses target on higher bus fares

* IPCA-15 index up 6.67 percent in 12 months to mid-June
    * Increase in bus fares, later revoked, led prices up


    By Silvio Cascione
    SAO PAULO, June 21 (Reuters) - A rise in public transport
fares, which sparked massive protests across Brazil, also helped
push inflation above the ceiling of the government's target.
    Brazil's benchmark IPCA-15 inflation index rose
6.67 percent in the 12 months through mid-June, up from 6.46
percent one month earlier, statistics agency IBGE said Friday.
    The government targets inflation at 4.5 percent with a
tolerance margin of 2 percentage points in either direction.
    On a monthly basis, inflation rose 0.38 percent, in line
with the median of analysts' forecasts.
    Bus and subway fares rose by over 6 percent in several
Brazilian cities such as Sao Paulo and Rio de Janeiro earlier
this month, triggering protests that later became massive
nationwide demonstrations against poor public services, police
violence and graft. 
    The increase was later revoked in several of those places,
including Sao Paulo and Rio, which could help slow inflation but
should squeeze further the tight budgets of Brazil's largest
cities, many of them heavily indebted.
    Stubbornly high inflation has dented consumer confidence
over the past few months, undermining an already fragile
economic recovery, and eroding Rousseff's high popularity rates.
The central bank has raised interest rates twice since April and
has pledged to keep increasing them until inflation slows.
    The rise in food prices, one of the main factors fueling
inflation earlier this year, slowed to an increase of 0.27
percent from the previous month. 
     
    Below is the result for each price category:     
     
                                  May      June
                                               
 - Food and beverages            0.47      0.27
 - Housing                       0.72      0.57
 - Household articles            0.18      0.68
 - Apparel                       0.76      0.72
 - Transport                    -0.03      0.10
 - Health and personal care      1.30      0.72
 - Personal expenses             0.46      0.37
 - Education                     0.08      0.17
 - Communication                -0.06      0.12
                                               
 - IPCA-15                       0.46      0.38
0 : 0
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