Floods, drought push Brazil inflation over target in 2024
The central bank last month warned two more interest rate hikes were likely in the coming months as inflation remained above the upper tolerance threshold of 4.5 percent.
This is likely to further irk President Luiz Inacio Lula da Silva, who is fiercely opposed to higher interest rates.
Year-on-year inflation for December was slightly lower at 0.52 percent, but above the 0.39 percent recorded in November, the state IBGE statistics body said.
Food and beverage prices have risen 7.69 percent over the past 12 months.
"The index was driven by the rise in food prices, which were influenced by adverse weather conditions in various periods of the year and in different locations in the country," said Fernando Goncalves, the manager of the Extended National Consumer Price Index ( IPCA).
Brazil's agricultural sector was in 2024 confronted with the worst drought in decades which fueled devastating fires across the country.
Meanwhile, historic flooding in April and May struck a blow to a key agricultural state, southern Rio Grande do Sul.
Despite strong growth and low unemployment figures, concerns over Brazil's ability to curb public spending has sent its currency, the real, to record lows against the dollar.
"We still have enormous challenges ahead, but Brazil today has a strong economy, which continues to grow," Lula said during a televised address to the nation before Christmas.
Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said this week that Brazil's recent period of rapid growth "is likely to come to an end" in 2025.
"Concerns about the public finances won't go away any time soon," he said.
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