Brasilia (AFP) – Brazil recorded year-on-year inflation of 4.44% in January, a slight increase compared to the previous measurement that brings the indicator close to the official tolerance limit, the statistical authority reported this Tuesday.

First modification: 02/11/2026 - 10:49

The Central Bank of Brazil sets the inflation target at 3%, with a margin of plus or minus 1.5 percentage points.

The largest Latin American economy closed 2025 with annual inflation of 4.26%, after spending most of the year outside the official tolerance band.

Monthly inflation in January, on the other hand, stood at 0.33%, identical to that of the previous month, according to data from the IBGE statistics institute.

Prices will influence the decision of the Central Bank, which maintains the reference rate at 15%, its highest level since July 2006 and one of the highest in the world.

In January, the issuer anticipated a possible "flexibility" of the rate starting in March, clarifying that the economic scenario still demands "caution." President Luiz Inacio Lula da Silva, who intends to seek re-election in October, has claimed several times that the interest rate is too high.

Prices rose in January mainly due to a 0.60% increase in the transportation sector, impacted by a 2.14% increase in the value of fuel.

Segments such as clothing and housing, however, registered slight contractions.

The market projects that this year Brazil's inflation will continue to decline and will reach 3.97% in December, according to the latest Focus bulletin published by the Central Bank.

© 2026 AFP

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