IBGE

Previous official inflation was impacted by lower transport and food prices

With the process of falling prices, the official inflation forecast, as measured by the Broad Consumer Price Index (IPCA-15), registered deflation of 0.18% in July. This is the lowest level for the month in 14 years and the best indicator performance since September 1998 (-0.44%). 

With this result, the index decreased from 3.52% to 2.78% in the last 12 months, the lowest variation in this comparison basis since March 1999, and resulted in a cumulative rate of 1.44% in the first half of 2017 .

The data were released on Thursday (20), by the Brazilian Institute of Geography and Statistics (IBGE).

Among the groups that make up the IPCA-15, the main influencer of the month was transport, which registered a fall in prices of 0.64%, in the face of the fall in the prices of ethanol (-4.81%) and gasoline (- 2.98%).

In addition, in July, there was a significant fall of 0.55% in food and beverage prices, driven by lower prices for potatoes (-19.07%), tomatoes (-8.48%) and fruits (-4 %).

Lower cost of living

In the last 12 months ending in June, official inflation fell from 3.60% to 3.00%. As a result, the financial market expects inflation to end the year at 3.29%, well below the target set by the Central Bank.

With the increasing process of falling inflation expectations, the National Monetary Council (CMN) decided to reduce the inflation target for the coming years. Today at 4.5%, the inflation target will be 4.25% in 2019 and 4% in 2020, both with a 1.5 percentage point tolerance

Source: Portal Brasil, with information from IBGE and Central Bank