By Silvio Cascione
SAO PAULO, May 6 (Reuters) - Brazil's inflation is seen slowing in April for the first time in nearly a year, offering support to President Dilma Rousseff whose government is struggling to contain rising prices without derailing a fragile economic recovery.
Brazil's benchmark IPCA consumer price index likely rose 6.41 percent in the 12 months through April, slowing from an increase of 6.59 percent in March and within the government's target range, according to the median forecast of 25 economists surveyed by Reuters.
The central bank targets annual inflation at 4.5 percent, with a tolerance margin of plus or minus two points.
On a monthly basis, consumer prices probably rose 0.47 percent in April, unchanged from the previous month's increase, according to the median of 28 forecasts.
Trailing 12-month inflation has accelerated every month since June last year as prices of food and services soared. The surge caught policymakers by surprise at a time when no Latin American peers with inflation targets are worried about prices.
Brazil's central bank reacted last month by raising interest rates from a record low to tame inflation that is seen complicating Rousseff's likely bid for re-election last year.
Food prices probably continued to drive inflation last month, the poll showed, with supply bottlenecks and strong consumer demand pushing prices up despite a slowdown in wholesale costs in recent months.
ANOTHER RATE HIKE POSSIBLE
The month-on-month increase in food prices likely slowed from March, though, reinforcing the scenario of slightly lower 12-month inflation by year-end. That means the central bank will probably feel comfortable raising interest rates slowly in coming months, just enough to keep long-term expectations under control, economists said.
'A decline in 12-month inflation to any level below the 6.5 percent ceiling of the inflation target's tolerance band would be good news for the central bank, and provide another reason to continue tightening monetary policy with caution,' said Jose Faria, an economist with Deutsche Bank, in a recent report.
The bank led by Alexandre Tombini is expected to increase interest rates by an additional 0.75 percentage point to 8.25 percent this year, according to the median forecast in a weekly central bank poll. Forecasts for full-year inflation in 2013 and 2014 remained above the mid-point of the target but below its current level, at 5.71 and 5.76 percent.
Brazil's statistics agency, IBGE, will release April inflation data on Wednesday at 9 a.m. local time (1200 GMT).
Forecasts for the monthly inflation rate ranged from 0.39 percent to 0.51 percent, and 12-month estimates varied from 6.32 percent to 6.45 percent.
(Reporting by Silvio Cascione; Editing by Kenneth Barry) Keywords: BRAZIL ECONOMY/INFLATION
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