Friday, January 6, 2012

Brazil meets 2011 inflation goal

Brazil's government just met its inflation target for 2011, a surprise victory forPresident Dilma Rousseff and a central bank that struggled for most of the year with rising food and commodities prices.

Data released by the government on Friday showed consumer prices rose 6.50% last year.

The bank's official inflation target was 4.5%, with a "tolerance band" of 2 percentage points in either direction.

Investors have already digested the fallout from Brazil's disappointing 2011, when Latin America's biggest economy grew only about 3%, below the pace that made it a star in recent years.

Inflation peaked on a 12-month basis at 7.31% in September and is expected to keep falling. The focus now has shifted to how much further the central bank will cut interest.