First signs that Brazil inflation may be close to peaking

Data to the middle of this month suggest that inflation in Brazil is likely to breach the upper bound of its target range for July as a whole but, with the pace of monthly price rises now slowing, also provide a glimmer of hope that inflation may be nearing its peak. This will bring some relief to policymakers at the central bank and could even give a boost to PresidentRousseff’s re-election campaign. But the bigger picture is that even if inflation is close to peaking, the pace at which it slows over the second half of this year is likely to be extremely gradual.