Summary: Annual inflation in Brazil rose to 4.50% in the first half of January, narrowly below the 4.52% median estimate from Bloomberg. Consumer prices increased 0.2% month-on-month, with food and health-related costs accounting for much of the upward pressure. The central bank, under Gabriel Galipolo, is widely expected to maintain the benchmark Selic rate at 15% this week.
Brazil's national statistics agency said Tuesday that the headline consumer price index registered an annual rate of 4.50% in the first half of January. That outcome came in just under the 4.52% median projection from analysts surveyed by Bloomberg.
On a monthly basis, consumer prices rose 0.2% from the prior month. The data underscores persistent price pressures as central bankers prepare for their first interest rate decision of 2026.
Food and beverages, the largest-weighted component of the index, was an important contributor to the acceleration. That category increased 0.31% in January, compared with a 0.13% rise in December. Costs within health and personal care also strengthened: personal hygiene items climbed 1.38%, while health insurance prices rose 0.49%.
The inflation release arrives as Brazil's central bank, led by Gabriel Galipolo, is widely expected to keep the benchmark Selic rate unchanged at 15% for a fifth consecutive time this week. The Selic at 15% remains near a two-decade high and reflects policymakers' caution as they continue efforts to cool demand.
Annual inflation closed out 2025 inside the upper bound of the central bank's target range - defined as 3%, plus or minus 1.5 percentage points. Nevertheless, the central bank's weekly Focus survey, published Monday, found that economists expect inflation to stay above 3% through 2029.
Despite the persistence of inflation, forecasters in the survey still anticipate monetary easing over the coming years. Economists expect the Selic to be reduced to 12.25% by the end of this year, followed by a further 275 basis points of easing to reach 9.5% through 2029.
Context and implications: The January readings point to ongoing upward pressure within core spending categories, especially food and health services. The forthcoming central bank decision this week is expected to hold policy steady, reflecting a balancing act between containing inflation and setting the path for eventual easing forecast by economists.