IPCA: deflation was driven by fuels; food prices go up

Although the Broad Consumer Price Index (IPCA) has registered deflation of 0.68%, in July, the group of foods and beverages continued with high prices. According to the Brazilian Institute of Geography and Statistics (IBGE), which released today (9) the official inflation data of the country, the high of 25.46% in long-life milk and 14.06% in milk and derivatives, put pressure on the group, which was 1.30% more expensive in the month.IPCA: deflation was driven by fuels; food prices go upIPCA: deflation was driven by fuels; food prices go up

According to the research manager, Pedro Kislanov, the group had the biggest positive change in the month, after rising 0.80% in June, impacted by the milk off-season period, which is being stronger than in recent years, and also by the increase in the cost to producers, including transport and electricity.

“This rise in milk prices is explained by the off-season period, which of seaFrom September to October, when the pastures are drier and this affects the supply of the product. But also due to higher costs to the producer, such as animal feed, mainly soy and corn, and fertilizers and other inputs. Let’s remember that two major exporters of agricultural inputs are Russia and Ukraine, so the export was harmed with the advent of the war at the beginning of the year.”

In June, long-life milk had already risen 10.72%. In the accumulated of the year the product was 77.84% more expensive and in 12 months the high is 66.46%. Derived products such as cheese (5.28%), butter (5.75%) and condensed milk (6.66%) also rose in July. With the rise in milk, food at home accelerated from 0.63% in June to 1.47% in July. On the other hand, food outside the home slowed down from 1.26% in June to 0.82%.

The fruits had a high of 4.40% in the month and accumulated an increase of 35.36% in 12 months. On the other hand, tubers, roots and vegetables fell by 15.62% in July, especially tomatoes (-23.68%), potatoes (-16.62%) and carrots (-15. 34%). However, in the 12-month period, tomatoes were 7.45% more expensive, potatoes 66.82% and carrots are costing 37.82% more than a year ago. The onion accumulates high of 75.15% in the period.


According to the IBGE, the fall in the IPCA was driven by the reduction in fuel prices, since in July gasoline fell by 15.48%, ethanol fell by 11.38% and vehicle gas was 5.67% cheaper. The transport group went from 0.57% in June to -4.51% in July. Year-to-date records -1%

On the other hand, also within the transport group, the price of air tickets contributed with the second biggest positive impact on the index, with an increase of 8.02% in the month and of 77.68% in the 12-month period.

“Prices have been rising since April, which is related to the increase in aviation kerosene, the exchange rate variation, since there was an appreciation of the dollar against the real, and an increase in demand, with the recovery of the services sector with the improvement in the context of the pandemic, especially some services related to tourism”, explained Kislanov.

The clothing group showed a deceleration from 1.67% to 0.58% in the month, with the fall in the price of cotton. Health and personal care decelerated from 1.24% in June to 0.49% in July due to the lower variation in health plans and the drop of 0.23% in personal hygiene items.

The group of personal expenses went from 1.13% to 0.49%, with the main increases in employee Sunethic (1.25%) and cigarettes (4.37%). Housing fell 1.05%, influenced by the 5.78% reduction in residential electricity.

By metropolitan region, all surveyed areas had a negative change in July. The smallest change occurred in Goiânia (-2.12%), with drops of 21.57% in gasoline and 14.90% in electricity. The biggest change was registered in São Paulo (-0.07%), the only region that had an increase in electricity (0.37%).

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