Brazil annual inflation likely fell below 5 percent in February: Reuters poll

People walk in front of a store on a commercial street in downtown Sao Paulo

By Silvio Cascione

BRASILIA (Reuters) – Brazil’s annual inflation rate probably fell in February to its lowest level since 2010, easing below 5 percent to approach the government target, a Reuters poll showed on Wednesday.

The survey’s median forecast was for consumer prices to have risen 4.88 percent in the 12 months through February, slowing from a 5.35 percent increase in January.

Brazil targets annual inflation at 4.5 percent, less than half of what it was running at until a year ago.

The rapid drop in inflation caused by the country’s worst recession on record has allowed the central bank to slash interest rates, with many investors betting policymakers could accelerate the pace of rate cuts at their next meeting in April.

On a monthly basis, prices rose 0.45 percent in February, up from an increase of 0.38 percent in January, according to the median prediction of 25 economists polled.

February’s inflation data will be released on Friday at 9 a.m.(1200 GMT) by the national statistics institute IBGE.

Lower inflation and interest rates are expected to help Brazil’s economy emerge from its two-year recession in 2017. That could bolster political support for unpopular President Michel Temer’s push to have Congress pass austerity measures.

A growing number of economists expect Brazil to lower its inflation target later this year for the first time in more than a decade, according to Reuters polls.

The government is carefully considering that possibility, Finance Minister Henrique Meirelles told Reuters last month.

(Reporting by Silvio Cascione Editing by W Simon)