SAO PAULO, Jan 24 (Reuters) - Brazil's annual consumer prices came in slightly above market expectations in the month to mid-January, statistics agency IBGE said on Tuesday, as policymakers in Latin America's largest economy work to lower inflation to the central bank's target.
The IPCA-15 consumer price index rose 5.87% in the 12 months to mid-January, slightly exceeding the 5.83% median forecast in a Reuters poll of economists, though slowing from the 5.9% seen in the previous month.
That came on the back of a 0.55% monthly increase, IBGE said, boosted by higher health and personal care and food and beverage costs. Economists had expected a 0.52% rise in the month.
The data was released a day after Finance Minister Fernando Haddad said he saw a chance of Brazil placing inflation "at least within the tolerance band" in 2023 after missing it for two years in a row, despite what he called a "tight target."
Brazil has an annual inflation goal of 3.25% this year, with a tolerance margin of 1.5 percentage point - tighter than the 3.5% target missed in 2022. Recently sworn-in leftist President Luiz Inacio Lula da Silva has criticized the target as a hindrance to economic growth.
Despite Lula's criticism, Brazil's central bank has pledged to act independently and remain vigilant to cool consumer prices, which reached a nearly three-decade high in the middle of 2022 before being scaled back by aggressive monetary tightening and government tax cuts.
In September, central bank policymakers paused a tightening cycle that had lifted rates to 13.75% from a 2% record low in March 2021.
The latest inflation figures "were good in qualitative terms," asset management firm Versa said, noting that core prices slowed more than expected, helped by industrial goods, while services also cooled.
"Overall, the inflation picture continues to improve, despite the year-over-year rate holding steady and the headline overshooting expectations," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.
"We think inflation will resume its decline from next month," he added, noting that an economic slowdown, tight financial conditions, improving global supply issues and the relatively stable Brazilian real would all put a lid on underlying inflationary pressures.
Mexico, the second-largest economy in Latin America, also released half-month inflation data on Tuesday, with both headline and core consumer price indexes accelerating and exceeding market expectations, leading markets to brace for fresh interest rate hikes ahead. (Reporting by Gabriel Araujo and Steven Grattan; Editing by Andrew Heavens and Paul Simao)
