Price pressures in Brazil at highest in almost 2 years: Report

By Ovunc Kutlu

ISTANBUL (AA) - Price pressures in Brazil climbed in June to their highest level in almost two years, according to a report by global data provider S&P Global on Monday.

South America's biggest economy in June saw the fastest rise in input costs and output charges since mid-2022, said the report. "Rates of inflation for both input costs and output charges hit 23-month highs."

The Manufacturing Purchasing Managers’ Index (PMI) rose from 52.1 in May to 52.5 in June. While a reading above 50 indicates expansion, below 50 shows contraction.

Despite the figure remaining in expansion territory, S&P Global said Brazilian manufacturers also struggled with rising cost pressures halfway through 2024 amid weakness in Brazilian real and crop losses.

"The Brazilian real posted the largest depreciation against the US dollar for two years (as of 21st June), a key factor that added to manufacturing price pressures," Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said in the report.

"Although exchange rate depreciation could have bolstered exports, the increase in prices seems to have eroded international competitiveness," she added. "External orders still rose, but only marginally."