Business

Brazil inflation rate hits 12-year high

  • 7 August 2015
  • From the section Business
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Inflation in Brazil has hit a 12-year high of 9.56%, official figures have shown.

The rising cost of electricity, in particular, has pushed the rate to its highest level since November 2003.

The country's central bank targets an inflation rate of 4.5% and has raised interest rates to 14.25% - among the highest of major economies - to combat rising prices.

High inflation is compounding Brazil's economic woes.

According to the International Monetary Fund, the country's economy is set to shrink by 1.5% this year.

Weaker demand for Brazil's commodities, particularly from the slowing Chinese economy, is the main reason behind the slowdown.

The country's President, Dilma Rousseff, is also trying to force through measures to cut the country's deficit by cutting spending and raising taxes.

Brazil is currently the world's seventh largest economy.

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