By Rogerio Jelmayer
SAO PAULO--Brazil's general price index, known as the IGP-M, saw a smaller increase in 2016, in a sign that inflationary pressures across Latin America's largest nation are slowing, providing room for more interest-rate cuts by the central bank.
The IGP-M figure increased 7.17% this year, versus a rise of 10.54% in 2015, private think tank Getulio Vargas Foundation said Thursday.
The IGP-M measures inflation adjusted for annual rental contracts of housing and commercial properties across Brazil.
In December, the IGP-M index rose 0.54%, compared with a drop of 0.03% in November. The December IGP-M figure measured prices from Nov. 21 to Dec. 20.
The December figure was in line with analysts' expectations for anincrease of between 0.33% and 0.60%.
Inflation is one of the challenges confronting Brazil's government as it grapples with the weak economy. Gross domestic product is expected to contract 3.5% this year, according to country's finance ministry.
Last month, the Brazilian central bank reduced its Selic base rate to 13.75% from 14%. Economists expect the bank to continue its cycle of reduction in the coming months.
Write to Rogerio Jelmayer at email@example.com
(END) Dow Jones Newswires
December 29, 2016 05:55 ET (10:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.