Global General

Inflation hits 5.2% in Brazil; food prices hike

(Xinhua)
Updated: 2010-12-24 14:19

RIO DE JANEIRO - Brazilian Minister of Finance Guido Mantega on Thursday blamed rising food prices for the higher inflation facing the country over the past few months.

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The higher rate is not a structural problem, Mantega said in comments on the central bank's quarterly inflation report, which projected higher inflation rates for 2010 and 2011.

"It is not a structural rise in the inflation rate, which means it will go down as soon as the commodities and food products prices fall," the minister said.

According to the inflation report released Wednesday, Brazil's inflation rate reached 5.25 percent in the first 11 months of 2010, much above the 3.93 percent in the same period last year.

The report projected a 5.9-percent inflation rate for 2010 and a 5-percent rate for 2011, well above the government's yearly inflation target of 4.5 percent.

The report called for raising the country's annual basic interest rate Selic to keep a lid on inflation.

The finance minister, who will maintain his position in the next administration, assured that 2011 would be a good year for the Brazilian economy.