Brazil's 2024 Inflation at 4.83% Exceeds Target, Central Bank Plans Rate Hikes to 14.25%

Jan 10, 2025, 01:34 PM

Brazil's annual inflation rate for 2024 ended at 4.83%, surpassing the central bank's target ceiling of 4.5%, according to the Brazilian Institute of Geography and Statistics (IBGE). This marks the eighth time since 1999 that the inflation target has been missed, with three breaches in the last four years. Gabriel Galípolo, the new president of the Central Bank, attributed the overshoot to a strong economy, a depreciated currency, and climatic factors. He noted that the real was the most depreciated currency in 2024, influenced by domestic factors such as market perceptions of the fiscal scenario. The Central Bank has been increasing the Selic rate, currently at 12.25%, to combat inflation, with plans for further hikes to 14.25% in January and March 2025. Galípolo also mentioned that inflation is expected to remain above the target ceiling until the third quarter of 2025 before entering a downward trajectory.