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(Bloomberg) -- Brazil’s inflation cooled slightly more than expected as President Jair Bolsonaro enacts a raft of measures to tame the rising cost of living before elections and the central bank readies another interest-rate hike.

Official data released Tuesday showed consumer prices rising 11.39% in mid-July from a year ago, below the 11.41% median estimate from economists in a Bloomberg survey. On the month, inflation was 0.13%.

With his sights set on October’s presidential election, Bolsonaro is rushing to ease economic pain and close the gap with his main challenger, leftist Luiz Inacio Lula da Silva. Brazilians are fuming over spiraling prices of food and fuel, and polls show they widely blame the incumbent for their troubles.

The central bank has responded with one of the world’s most aggressive tightening cycles in the wake of the pandemic, raising rates by 11.25 percentage points since March 2021. Policy makers are expected to deliver a boost of half a percentage point on Aug. 3 and potentially stop hiking.

Economists are concerned that the mix of high borrowing costs and inflation will likely cause a recession later this year -- and that Bolsonaro’s measures will stoke prices in the long term.

Government Efforts

In recent weeks, the far-right leader has pushed plans to slash taxes on utilities and gasoline, while congress enacted a multi-billion dollar aid package that expands cash assistance to the poor. 

Government efforts may be beginning to take effect, as transportation and housing costs tumbled by 1.08% and 0.78% on the month, respectively. The statistics agency reported that the headline price reading was the smallest mid-month gain in over two years.

Still, consumers are getting pinched elsewhere. Six of the nine groups of good and services tracked by the agency became more expensive in the first half of July, with food and beverages prices that jumped by 1.16% leading the gains. 

“Overall, this looks like a good start to the third quarter,” wrote Andres Abadia, chief Latin America economist at Pantheon Macroeconomics. “The downtrend, however, will be limited,” he cautioned, due to a weaker real amid global-recession fears and Brazil’s weakening fiscal outlook.

Analysts see consumer prices rising 5.3% at the end of next year, according to the central bank’s latest economist survey published on Monday. The bank targets annual inflation at 3.5% for 2022, and 3.25% in 2023.

(Updates with chart, inflation details beginning after second paragraph)