UPDATE 1-Brazil inflation to mid-Aug up less than forecast

Fri Aug 22, 2008 8:35am EDT
(Recasts, adds details on main inflation items)
SAO PAULO, Aug 22 (Reuters) - Inflation in Brazil slowed more than forecast in the month to mid-August because of "an abrupt deceleration" in food prices, the national statistics agency said on Friday.
The benchmark IPCA consumer price index rose 0.35 percent in the month to mid-August, compared with a 0.63 percent increase in the month to mid-July, statistics agency IBGE said.
The index was expected to rise 0.38 percent, according to the median estimate of 30 economists surveyed by Reuters. Estimates ranged from 0.34 percent to 0.5 percent.
Food and beverage prices rose 0.25 percent in the period, compared with a 1.75 percent surge the previous month, and were the main item helping push the IPCA index lower. Prices of potatoes dropped 7.55 percent in the period, while beans, rice and other staple food also fell or rose at a much slower pace.
Clothing costs fell 0.48 percent after rising 0.39 percent in the month to mid-July, contributing to the slower IPCA.
In the 12 months to mid-August the index jumped 6.23 percent, lower than the 6.3 percent rate in the year to mid-July and 6.37 percent in the year until the end of July.
The central bank, which uses the IPCA as a guide when setting interest rates, has an annual inflation target of 4.5 percent with a tolerance band of 2 percentage points.
The so-called IPCA-15 tracks consumer prices from around the 15th of one month to the 15th of the next. The central bank uses the IPCA as a guide when setting interest rates.
(Recasts, adds details on main inflation items)
SAO PAULO, Aug 22 (Reuters) - Inflation in Brazil slowed more than forecast in the month to mid-August because of "an abrupt deceleration" in food prices, the national statistics agency said on Friday.
The benchmark IPCA consumer price index rose 0.35 percent in the month to mid-August, compared with a 0.63 percent increase in the month to mid-July, statistics agency IBGE said.
The index was expected to rise 0.38 percent, according to the median estimate of 30 economists surveyed by Reuters. Estimates ranged from 0.34 percent to 0.5 percent.
Food and beverage prices rose 0.25 percent in the period, compared with a 1.75 percent surge the previous month, and were the main item helping push the IPCA index lower. Prices of potatoes dropped 7.55 percent in the period, while beans, rice and other staple food also fell or rose at a much slower pace.
Clothing costs fell 0.48 percent after rising 0.39 percent in the month to mid-July, contributing to the slower IPCA.
In the 12 months to mid-August the index jumped 6.23 percent, lower than the 6.3 percent rate in the year to mid-July and 6.37 percent in the year until the end of July.
The central bank, which uses the IPCA as a guide when setting interest rates, has an annual inflation target of 4.5 percent with a tolerance band of 2 percentage points.
The so-called IPCA-15 tracks consumer prices from around the 15th of one month to the 15th of the next. The central bank uses the IPCA as a guide when setting interest rates.