BRASILIA (Reuters) - Brazil's annual inflation rate is seen softening in mid-June but will still be strong enough to diminish the prospects of the central bank hitting its inflation target range this year, a Reuters poll showed on Monday.
Consumer prices, as measured by the IPCA-15 index <BRIPCA=ECI>, probably rose 9.10 percent in the 12 months through mid-June, easing from 9.62 percent in mid-May, according to the median of 19 forecasts in the survey.
On a monthly comparison, prices probably rose 0.52 percent, down from an increase of 0.86 percent in mid-May, according to the median of 22 estimates for the indicator due out on Tuesday.
- Photos: Women's March In New York City30 Pictures
- PHOTOS: 16 Betty White quotes to brighten your day17 Pictures
A smaller increase in food prices, falling airfares and the recent strengthening of the Brazilian currency probably helped inflation slow down in the second half of May and first half of June, economists in the poll said.
The official inflation target is Brazil is 4.5 percent, a goal last achieved in August 2010. The central bank has pledged to slow price increases at least to the top end of the tolerance range, at 6.5 percent, but polls of economists have shown inflation expectations on the rise in recent weeks, following an increase in medicine prices and utility rates.
The longer inflation takes to fall closer to the target, the more investors will probably have to wait for interest rate cuts by the central bank, economists said. Brazil's benchmark interest rate is currently at its highest in nearly 10 years at 14.25 percent, despite a severe recession.
"The central bank should have room to cut rates in the last quarter of 2016, later than the market is now pricing in July," Morgan Stanley analysts wrote based on their own inflation forecasts.
Brazil's 2015 annual inflation stood at 10.67 percent, the highest in 12 years, compounding an economic and political crisis. President Dilma Rousseff was suspended from office in May to await a Senate trial on charges she broke budgetary laws.
(Reporting by Silvio Cascione Editing by W Simon)