Brazil's inflation eases in mid-March, still tops forecasts

SAO PAULO, March 26 (Reuters) - Consumer prices in Brazil rose more than expected in the month to mid-March, official data showed on Thursday, though they eased from a sharp rise a month earlier.

Prices as measured by the IPCA-15 index were up 0.44% in the period, statistics agency IBGE said, above the 0.29% median estimate a Reuters poll of economists but down from a 0.84% increase in the previous month.

The data come as Brazil's central bank last week cut its benchmark interest rate by 25 basis points to 14.75%, kicking off an easing cycle with a cautious move as the U.S.-Israeli war on Iran stoked inflation concerns, largely related to higher oil prices.

Prices rose across all nine groups surveyed, IBGE said, with the biggest impact coming from the closely watched food and beverage group, which posted a 0.88% increase.

Annual inflation came in at 3.90%, also above the 3.74% expected by economists, but down from 4.10% a month earlier.

Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points.

The bank said earlier on Thursday it expects inflation to pick up later this year, citing higher oil prices, and remain above the target throughout its entire forecast horizon.

Pantheon Macroeconomics' chief Latin America economist, Andres Abadia, said the March reading showed the disinflation process remains "intact" in Latin America's largest economy, but warned of upside risks related to the recent oil shock.