SAO PAULO (Reuters) – Brazilian inflation as measured by the IPCA consumer price index rose 0.26% in June over May, picking up after the deflation reported in the previous month, according to government statistics agency IBGE on Friday.

In the 12 months to June, Brazil recorded 2.13% inflation, roughly in line with a Reuters poll of economists which had predicted prices would increase by 2.16%.

Inflation as measured by the IPCA index sank 0.38% in May, as falling fuel and air travel costs due to the coronavirus crisis brought the steepest monthly decline in consumer prices since August 1998.

Annual inflation is well below the central bank’s official 2020 target of 4.0%, even allowing for the margin of 1.5 percentage point allowed on either side of that figure.

Brazil’s central bank is studying recent data showing inflation is somewhat above expectations, which could allow room for a “residual” cut in interest rates, its president, Roberto Campos Neto, told Reuters this week.

Campos Neto expects growth projections to improve as pandemic emergency income relief payments and credit for small and medium companies spur spending, although given the slump he does not see a recovery generating much inflation.

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