The official inflation preview for October was 0.18%, pressured mainly by the price of fuel. Food prices fell for the fifth consecutive month and helped the Broad National Consumer Price Index 15 (IPCA-15) slowing down compared to September, when it reached 0.48%.
In the 12-month period, the IPCA-15 totals 4.94%, below the 5.32% observed in the 12 months ending in September. The data was released this Friday (24) by the Brazilian Institute of Geography and Statistics (IBGE).
Based on previous data, annual inflation remains above the government’s target of 3% per year with a tolerance of 1.5 percentage points (pp) more or less, that is, reaching a maximum of 4.5%.
Financial institutions consulted by the Focus Bulletin, from the Central Bank (BC)estimate that the IPCA should end the year at 4.7%.
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Influences
Of the nine groups of products and services researched by IBGE, five were discharged from September to October:
– Clothing (0.45%)
– Personal expenses (0.42%)
– Transport (0.41%)
– Health and personal care (0.24%)
– Housing (0.16%)
– Education (0.09%)
– Household items (-0.64%)
– Communication (-0.09%)
– Food and beverages (-0.02%)
Transport
The transport group represented the greatest upward pressure, accounting for 0.08 percentage points of the IPCA-15. Fuel (1.16%) and air tickets (4.39%) contributed. Gasoline, the product with the greatest weight among all 377 sub-items surveyed, rose 0.99%. Ethanol became 3.09% more expensive in the month.
Food drops for the 5th month
Within the food and beverage group, food at home fell 0.10%, influenced by:
– onion (-7.65%)
– chicken egg (-3.01%)
– rice (-1.37%)
– long life milk (-1%)
Each of these declines represents 0.01 pp in the IPCA-15. In the five-month period of decline in the food and beverage group, there is an accumulated relief of 0.98%.
Cheaper electricity bill
In the housing group, the slowdown from 3.31% (September) to 0.16% (October) was due to the improvement in residential electricity, which fell 1.09%. Of all the products and services researched by IBGE, the electricity bill was the one that brought the index down the most (-0.05 percentage points).
The explanation is the migration from the red tariff flag level 2 to 1. In number 2, there is an additional charge of R$7.87 on the electricity bill for every 100 KWh consumed. At level 1, 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.
IPCA 15
The IPCA-15 basically has the same methodology as the IPCA, the so-called official inflation, which serves as the basis for the government’s inflation target policy.
The difference lies in the price collection period and geographic coverage. In the preview, the research is carried out and published even before the reference month ends. In relation to the current disclosure, the collection period was September 16th to October 13th.
Both indices take into account a basket of products and services for families with incomes between one and 40 minimum wages. Currently the minimum value is R$1,518.
The IPCA-15 collects prices in 11 locations across the country (the metropolitan regions of Rio de Janeiro, Porto Alegre, Belo Horizonte, Recife, São Paulo, Belém, Fortaleza, Salvador and Curitiba, in addition to Brasília and Goiânia.); and the IPCA, 16 locations (includes Vitória, Campo Grande, Rio Branco, São Luís and Aracaju). The full IPCA for October will be released on November 11th.
