Brazil's inflation cools as prices post first monthly decline in a year

SAO PAULO, Aug 26 (Reuters) - ‌Brazil's annual ​inflation ​slowed more than expected in the 12 months through mid-August as consumer prices posted their first ‌monthly decline in a year, reinforcing signs that price ⁠pressures are easing in Latin America's largest economy.

The IPCA-15 consumer price ‌index rose 4.24% in the ‌12 months through mid-August, statistics agency IBGE said on Wednesday, down from 4.52% in the previous month and below ​all estimates in a Reuters poll of economists, whose median forecast was 4.34%.

On a monthly basis, prices fell ⁠0.40%, the first negative reading since August 2025. The figure also came in ​below all forecasts in the Reuters poll, which had pointed to a median decline of 0.30%.

Annual ​inflation remains within the central bank's ‌target range of 3%, plus or minus 1.5 percentage points.

The central bank cut its benchmark ⁠interest rate by 25 basis points to 14% this month, marking the fourth consecutive rate cut, and left the door open for ⁠further easing as inflation moderates and economic activity cools. The central bank's ​next policy meeting is set for September 15-16.

The monthly IPCA-15 drop was driven mainly by lower housing, transportation, and food prices, according ‌to IBGE.

Housing costs fell 1.41%, led by lower electricity bills as consumers benefited from a ‌one-off discount tied to the results of the Itaipu hydroelectric ⁠dam. Transportation prices dropped 1%, ‌reflecting cheaper air ​fares and fuel, while closely-watched food and beverage costs fell 0.57%.

(Reporting by Gabriel Araujo; Editing by Paul ‌Simao)

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