SAO PAULO – Brazil, South America’s largest economy, finished 2017 with an inflation rate of 2.95 percent, the lowest level in 19 years, the Brazilian Institute of Geography and Statistics (IBGE) said on Thursday.

The moderate inflation rate was due mainly to a sharp drop in food prices during the year, the IBGE said.

Brazil, whose economy is starting to emerge from a deep recession, had an inflation rate of 6.29 percent in 2016.

The inflation rate last year was the lowest since 1998, when the consumer price index (CPI) rose 1.65 percent, the IBGE said.

The government’s inflation target for 2017 had been 4.5 percent, a number that turned out to be much higher than the actual year-end figure, marking the first time since 1999 that the final CPI number came in below the official goal.

Economists estimate that the gross domestic product (GDP) grew 1 percent last year, ending the recession, and they are projecting 3 percent economic growth in 2018.

Brazil’s economy is slowly recovering after contracting 3.8 percent in 2015, the worst performance in 25 years, and 3.6 percent in 2016, marking the first time since 1931 that GDP fell for two consecutive years.

Analysts expect the inflation rate to come in at 3.95 percent in 2018, well below the government’s 4.5 percent target.