SAO PAULO, June 12 (Reuters) - Brazil's consumer inflation accelerated more than expected in May, official data showed on Friday, breaching the top of the central bank's target range for the first time since October ahead of a key rate decision next week.
Annual inflation in Latin America's largest economy rose to 4.72% in May, statistics agency IBGE said, up from 4.39% in April and above the 4.66% forecast by economists in a Reuters poll.
On a monthly basis, consumer prices rose 0.58%, easing from
0.67% in April. Economists had expected a 0.53% rise.
The data comes ahead of the central bank's June 16-17 policy meeting. It targets inflation at 3%, plus or minus 1.5 percentage points.
Policymakers in April cut the benchmark Selic rate by 25 basis points for a second straight meeting, to 14.50%, but left their next move open, citing emerging inflation risks as the U.S.-Israel war with Iran drags on.
The increase in May inflation was mainly driven by food and beverages, which rose 1.33% from the month before. Transport costs, by contrast, fell 0.46% after jumping in March due to the oil price shock linked to the Middle East conflict.
RATE CUTS IN CHECK
Central bank Governor Gabriel Galipolo warned last week that demand-driven pressures are adding to inflation, pointing to indicators that strip out supply shocks, such as those linked to the Iran conflict.
The remarks came as Brazilian banks have been trimming expectations for further rate cuts, citing a tougher inflation outlook driven by higher oil prices and domestic fiscal stimulus.
A weekly central bank survey showed economists increasingly expect a shallower easing cycle. The latest poll sees the Selic rate at 13.50% by year-end, up from 13.25% a week earlier.
(Reporting by Fernando Cardoso. Editing by Mark Potter)
