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)
