Brazil's mid-April consumer prices undershoot forecasts ahead of rate decision

SAO PAULO, April ‌28 (Reuters) - Brazil's inflation ​accelerated ​less than expected in early April despite a jump in fuel and food prices, official ‌data showed on Tuesday, reinforcing market expectations that ⁠the central bank will deliver a fresh interest rate cut later ‌this week.

Annual inflation as ‌measured by the IPCA-15 index came in at 4.37% in the period, statistics agency IBGE said, up from ​3.90% a month earlier but below the 4.49% forecast by economists in a Reuters poll.

Brazil's central bank ⁠is widely expected to cut its benchmark interest rate by 25 basis points ​to 14.50% on Wednesday, after launching an easing cycle last month as policymakers balance inflation ​pressures and a sluggish economy.

The bank ‌targets inflation at 3%, plus or minus 1.5 percentage points.

"We think that the easing ⁠in underlying price pressures and very high real interest rates should give the central bank room to deliver another 25bp ⁠cut," Capital Economics' senior emerging markets economist Kimberley Sperrfechter said.

In the month ​to mid-April, IBGE said, consumer prices were up 0.89%. The rise was the steepest for the IPCA-15 index since February 2025, ‌but still undershot the 1.0% increase expected in the Reuters poll.

The monthly results were ‌mainly driven by higher food, beverage and transportation prices, the ⁠agency added, with fuel ‌costs jumping amid ​rising global oil prices related to the Middle East conflict.

(Reporting by Gabriel Araujo; Editing by Aida ‌Pelaez-Fernandez)

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