The inflation has been on the rise since January when the government initiated a number of austerity measures and tax increases aiming at balancing overall budget. The new taxes have raised the prices of basics like electricity, bus fares and gasoline. The government has been trying to fight inflation by increasing the borrowing cost. In fact, since September of 2014, the Selic overnight lending rate was raised by 275 basis points to 13.75 percent. However, the inflation rate is still on an upward trend, accelerating for the sixth straight month in June to its highest since December of 2003.
The monthly rate rose to 0.79 percent in June from 0.74 percent in May. Prices of personal expenses accounted the most for the rise (up 1.63 percent), boosted by a 30.8 percent increase in gambling prices. Additional upward pressure came from transport (up 0.7 percent), as prices of air fares rose 29.19 percent and cost of water and sewerage went up 4.95 percent.
Considering the first semester of 2015, consumer prices jumped 6.17 percent, compared to a 3.75 percent increase in the same period of 2014 and the highest in eleven years.