SAO PAULO (Reuters) - Brazil's consumer prices rose slightly less than expected in the mid-April reading, data from statistics agency IBGE showed on Friday.
Prices in Latin America's largest economy rose 0.21% in the month to mid-March, below the 0.29% growth expected by economists polled by Reuters.
This took the inflation of the previous 12 months to 3.77%, slowing down from 4.14% in the 12 months to mid-March and also below expectations of a 3.86% increase. The reading marked the first time since July last year the figure came in below 4%.
"All told, the inflation picture continues to improve in Brazil, thanks to favorable base effects, the lagged effect of high-interest rates and softening domestic demand," said Andres Abadia, Chief Latam Economist at Pantheon Macroeconomics.
This adds to the view that interest rate cuts will continue in the near term, he wrote in a note to clients.
Brazil's central bank delivered 50-basis-point interest rate cuts at each of its last six meetings, but Governor Roberto Campos Neto has opened the door for that easing pace to be reduced.
Given the recent sell-off of the Brazilian real and a more cautious instance from the monetary authority committee, "the most probable scenario is a 25 basis-point cut" on the May meeting, Abadia added.
The group comprised of food and beverages reported the greatest price hike in the period, growing 0.61%, which accounted for 0.13 percentage points of the total increase.
The transportation group, on the other hand, was the only one to report disinflation, as airfare prices fell 12.2%.