The price increase contrasts with the slowdown in the Brazilian economy, which is partly due to the cycle of interest rate hikes promoted by the Central Bank.

Inflation in Brazil rose to 5.06% year-on-year in February, half a point higher than in January, reaching its highest level since September 2023, pressured by rising electricity prices, Lula da Silva's government reported Wednesday.

The national consumer price index soared to 1.31% in the second month of the year, up from 0.16% in January, according to the Brazilian Institute of Geography and Statistics (IBGE).

That jump is the highest recorded for a February month since 2003.

The monthly increase was primarily influenced by the 16.80% increase in residential electricity prices, according to the Brazilian government's statistics office.

Rising food prices, a source of great concern for President Luiz Inácio Lula da Silva, eased slightly from 0.96% in January to 0.70% in February.

Thus, the year-on-year inflation rate broke a sequence of two consecutive declines in Brazil and moved away from the target ceiling for this year, which is 4.5%.

The rise in prices contrasts with the slowdown in the Brazilian economy, which grew just 0.2% in the last quarter of 2024 compared to the previous three months.

This slowdown is partly due to the cycle of official interest rate hikes promoted by the Central Bank to control rising prices.

The base interest rate currently stands at 13.25% per year, and the issuing body is expected to raise it by one percentage point next Wednesday due to continued price increases, the country's fiscal situation, and international uncertainty.

The financial market, in fact, forecasts that rates will close out 2025 at 15%. Despite this, it estimates that Brazilian inflation will end the year at 5.68%.

Brazil, Latin America's largest economy, recorded inflation of 4.83% at the end of 2024, exceeding the percentage of 2023 (4.62%).