Focus Bulletin

Analysts are more optimistic about the cost of living in Brazil. Expectation is that the IPCA will be 6.40% at the close of 2016

The financial market started to project inflation in 2016 within the limits of tolerance sought by the Central Bank. For the seventh consecutive week, analysts improved forecasts for the Brazilian cost of living. The latest estimate is that the year ends with a Broad Consumer Price Index (IPCA) of 6.40%.

The data are part of the Focus Bulletin , a weekly publication that brings together the projections of about 100 analysts for the economy. The Central Bank, which is responsible for the research, releases these figures every Monday.

The survey shows that, at the beginning of the year, the market was pessimistic with the cost of living in Brazil, and in February it even projected inflation well above the tolerance limits, around 7.6%. Since then, numbers have entered a gradual process of reversal.

Important products in the table of the Brazilian, who at the beginning of the year presented prices soared, began to register fall. Carabao beans, only in November, fell 17.52%; The long life milk, also last month, fell by 7.03%.

Falling food prices

This movement of falling food prices at the end of the year has been the main positive influence on the cost of living. This trend also led to improved expectations for the IPCA in December.

Between the latest release of the Focus and this, the projections for inflation in December went from 0.49% to 0.41%. A month ago, that figure was even higher, it was at 0.55%.

The official data of the last month of the year and which will show what the IPCA of 2016 will be known only on January 11, 2017, when the Brazilian Institute of Geography and Statistics (IBGE) announces the result.

Source: Portal Brazil, with the information Central Bank and IBGE