Brazil’s annual inflation rate eased to 4.22% in August 2026 from 4.44% in July, coming in slightly below market expectations of 4.27% and moving further within the central bank’s target band of 1.50%–4.50%. Price growth slowed across several key categories, including housing (4.90% vs. 5.93%), clothing (3.25% vs. 3.87%), transport (3.04% vs. 3.64%), health and personal care (5.84% vs. 6.16%), and education (5.98% vs. 6.27%).
The easing in transport inflation was partly driven by lower fuel and energy inflation, which decelerated to 4.60% from 7.60%. Despite a sharp rise in international oil prices due to heightened tensions in the Middle East, Petrobras chose not to immediately pass through this external volatility to domestic refinery prices, leading to a cumulative gap relative to international benchmarks.
On a monthly basis, consumer prices fell 0.32% in August, following a marginal 0.1% increase in July. So far this year, the CPI has risen 3.11%.
