Prices as measured by the benchmark IPCA index rose 0.84% last month, up from January's gain of 0.53%. The year-on-year rate fell to 5.6%, from 5.77% in January, marginally above the consensus of 5.54%. The relatively modest month-on-month gain was driven by eight of the nine components, particularly tuition fees, healthcare and housing and utilities, overshadowing a decline in clothing prices. "The inflation picture remains benign in Brazil, and we still believe the headline rate will continue to fall during Q2 thanks to the lagged effect of tight monetary policy, struggling domestic demand, stabilizing commodity prices, and benign weather and supply conditions," said Pantheon Macroeconomics' chief Latin America economist Andres Abadia.
Andrea Angelo, chief economist for inflation at broker Warren Rena, said the latest figures continued to show "mixed signals" as in the previous reading. "But we still don't see a reversal of the expected slowdown of core and service prices," she added. (Reporting by Gabriel Araujo and Steven Grattan; editing by Jason Neely)
