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Brazil records highest inflation in four years

Brazil, Latin America's biggest economy, on Tuesday recorded inflation of 4.52 percent in 2020 -- the highest in four years -- fueled by food prices which shot up more than 14 percent amid the coronavirus pandemic.

The official figure released by the IBGE statistics institute, exceeded market predictions of 4.37 percent.

The difference, according to the IBGE, is explained by a December inflation rate of 1.35 percent over November -- the highest monthly jump since February 2003, when it was 1.57 percent.

The number is higher than the Central Bank's four-percent inflation target.

"Last year, the 14.09-percent rise in food and beverage prices weighed on the pockets of Brazilians," said IBGE study leader Pedro Kislanov.

It reflected a global trend of rising product prices "in a year marked by the Covid-19 pandemic," he added.

The price of soy more than doubled, and that of rice, a Brazilian staple, rose by 76 percent.

Fruit became 25 percent more expensive and meat prices rose by nearly 18 percent.

Property and electricity prices also rose.

For 2021, with inflation targeted at 3.75 percent, the markets are forecasting a figure of 3.34 percent, according to a Brazil Central Bank (BCB) report.

The BCB will decide at its next meeting on January 20 whether to maintain its benchmark interest rate at a historic low two percent, or raise it due to inflationary pressure.

Brazil's economy, which went into recession in the third quarter of 2020, was bolstered by subsidies paid to almost a third of the population of the country of 212 million people.

But the aid came to an end on December 31, despite an intensification of the outbreak which has killed more than 203,000 people in Brazil to date. Vaccination has yet to begin.

Topics: Brazil , Latin America , Economy , COVID-19 , Pedro Kislanov
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