Brazil’s inflation at 12-year high

Brazil’s inflation climbed above 10 percent in November reaching the highest level in 12 years, the government announced on Wednesday.

Consumer prices over the past month stood at 10.48 percent – a figure that was above expectations and could force tighter monetary policy despite a severe recession.

The state statistics organization said November inflation rose 1.01 per cent for a year-on-year increase of 10.48. The previous high was 11.02 per cent in November 2003.

The inflation in October stood at 9.93 percent and its record rise could be a sign of upcoming political trouble for the world’s seventh biggest economy.  

For a second month running, increased fuel costs, up 5.14 per cent, drove the general rise of costs.

Brazil is currently going through a turbulent economic period with deep recession, rising unemployment, and a dramatic drop in investor confidence fuelled by an impeachment drive against President Dilma Rousseff.

The country’s inflation has specifically gained steam in recent months as a political crisis threatening to unseat President Rousseff fueled a sharp currency devaluation, Reuters reported.

Food prices also picked up as a strong El Niño weather pattern boosted rainfall in southern Brazil.

Current inflation is much milder than in previous episodes, but it has been accompanied by the worst recession in decades. Analysts forecast an economic contraction of more than 3 percent this year and more than 1 million jobs lost, the Reuters report added.

The price spikes have fueled popular discontent against President Rousseff as Brazilians recall several bouts of hyperinflation in the past century.  

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