BRAZIL’S annual inflation rate climbed closer to 8 percent in mid-March, the highest in nearly 10 years, government data showed Friday.

    Consumer prices as measured by the IPCA-15 index rose 7.90 percent in the 12 months to mid-March, in line with expectations and up from a 7.36 percent increase in mid-February, statistics agency IBGE said.

    The government targets inflation at 4.5 percent.

    Prices gained 1.24 percent from mid-February, slowing from an increase of 1.33 in the previous month.

    High inflation has been one of Brazil’s biggest obstacles to faster economic growth in recent years, weighing on consumer and business confidence and prompting the central bank to raise interest rates to double-digits.

    Higher prices for electricity, fuel and food accounted for most of mid-March inflation.

    Electricity rates jumped 10.91 percent after the government finally opted to pass on the higher costs of running emergency thermal generators. The government is scrambling to curb electricity demand to avoid energy rationing after shielding consumers from higher rates last year.

    Fuel prices gained 6.25 percent, mostly due to a recent tax hike by the Finance Ministry to help plug a growing budget deficit that threatens Brazil’s investment-grade rating.

    Food prices rose 1.22 percent, up from 0.85 percent in mid-February, pushed up by higher costs of fresh vegetables such as onions, carrots and tomatoes after one of the rainiest months in years in some areas of Southern Brazil.

    (SD-Agencies)