Brazil 2017 inflation tops forecasts

SAO PAULO, Jan 10 (Reuters): Brazil's 2017 inflation rate topped analysts' expectations but missed the official target range for the first time, setting the stage for interest rates to remain at all-time lows.

The benchmark IPCA index rose 2.95 per cent last year, the lowest annual rate since 1998 and below the government's target of 4.5 per cent, plus or minus 1.5 percentage points, state statistics agency IBGE said on Wednesday.

The reading came in above even the highest forecast in a Reuters poll of 26 economists as food prices rebounded after seven months of declines.

The median estimate in the survey was for a 2.80 per cent annual rate.

Under Brazilian law, central bank policymakers must publish an open letter whenever they fail to meet the goal.

In recent years, the bank avoided doing so in near-miss cases by rounding the inflation rate to single digits.

A central bank representative declined to say whether it would publish a letter this year. The reading is a far cry from the rates seen early in 2016, when inflation reached 13-year highs, even as Latin America's largest economy slipped into its deepest recession in decades.