Inflation calculated by the National Consumer Price Index (INPC) closed October at 0.03%, showing a reduction in relation to September’s 0.52%. With the result, the 12-month cumulative figure is 4.49%. In the 12 months ended in September, the index reached 5.1%. 
The data was released this Tuesday (11) by the Brazilian Institute of Geography and Statistics (IBGE).
In October, the food products surveyed by IBGE had zero variation (0%). Non-food items rose 0.04%.
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Electricity bill helps
The group of products and services that pushed the INPC down the most was housing (-0.32%), which represented an impact of minus 0.06 percentage points.
The explanation lies in the migration of red tariff flag level 2 to 1. In level 2, there is an additional charge of R$7.87 on the electricity bill for every 100 KWh consumed. At level 1, in force in October, the extra is R$4.46.
The extra charge is determined by Aneel to pay for thermoelectric plants in times of low hydroelectric reservoirs. The additional amount is necessary, as the energy generated by thermoelectric plants is more expensive than hydroelectric plants.
Salaries
The INPC is widely used as an index for calculating annual salary adjustments for different categories.
The minimum wage, for example, in addition to other metrics, takes the annual INPC from November to reach the value in the following year. Unemployment insurance, benefits and the INSS ceiling are readjusted based on the December result.
>>Understand how the calculation of inflation rates works
INPC x IPCA
The IBGE also released this Tuesday the Broad National Consumer Price Index (IPCA), known as official inflation, which it was 0.09% in September and 4.68% in 12 months.
The difference between the two indices is that the INPC calculates inflation for families with an income of one to five minimum wages and the IPCA for households with an income of one to 40 minimum wages. Currently the minimum is R$1,518.
IBGE gives different weights to the price groups surveyed. In the INPC, for example, food represents almost 25% of the index, more than in the IPCA, around 21%, as lower-income families spend proportionally more on food. From the opposite perspective, the price of a plane ticket weighs less on the INPC than on the IPCA.
According to IBGE, the INPC calculation “aims to correct the purchasing power of salaries, through measuring price variations in the consumption basket of the lowest-income salaried population”.
Price collection is carried out in ten metropolitan regions: Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Vitória, Rio de Janeiro, São Paulo, Curitiba and Porto Alegre. Collection is also carried out in Brasília, Goiânia, Campo Grande, Rio Branco, São Luís and Aracaju.
