Brazil mid-month inflation decelerates in May amid tight monetary policy

SAO PAULO, May 27 (Reuters) - Inflation in Brazil decelerated more than expected in the month to mid-May, figures from government statistics agency IBGE showed on Tuesday.

Consumer prices as measured by the IPCA-15 index rose 0.36% in the month to mid-May, down from 0.43% in the previous month.

The reading came below the 0.44% increase projected by economists in a Reuters poll.

This marks the third deceleration in the index amid tight monetary policy, with interest rates in Brazil at the highest level in almost 20 years.

Food and beverages fell from 1.14% to 0.39%, IBGE said, while household electricity had the greatest positive impact in the reading.

The IBGE noted that seven of the nine groups of products and services examined registered increases.

In the 12 months to mid-May, prices increased 5.40%, IBGE data showed, below the 5.49% expected in the Reuters poll, but still far exceeding the 3% official target, with a tolerance range of 1.5 percentage points either side.