12-month inflation climbs 4.42%, according to IBGE data

10/09/2024

Brazil’s official inflation rate, tracked by the Broad Consumer Price Index (IPCA), increased to 0.44% in September, following a 0.02% drop in August. In September 2023, the IPCA recorded a 0.26% rise. These figures were released on Wednesday by the Brazilian Institute of Geography and Statistics (IBGE).

The September rate was slightly below the median forecast of a 0.45% increase, gathered from 39 financial institutions and consultancies surveyed by Valor Data.

Over the 12 months leading up to September, inflation rose 4.42%, compared to 4.24% up to August. The median estimate by Valor Data was 4.43%, with projections ranging between 4.21% and 4.51%.

The 12-month IPCA result exceeded the core inflation target set by the National Monetary Council (CMN) and pursued by the Central Bank, which is 3% for 2024. However, it remained within the permissible deviation of 1.5 percentage points, either up or down.

From January to September 2024, the IPCA increased by 3.31%. During the same period in 2023, the cumulative rise was 3.50%.

Among the nine spending categories used to calculate the index, housing shifted from a 0.51% decrease to a 1.80% increase between August and September, driven by a 5.36% hike in electricity prices. Food and beverages moved from a 0.44% decline to a 0.50% rise. Transportation went from 0% to 0.14%, and health and personal care increased from 0.25% to 0.46%.

In negative territory were household goods (from 0.74% to -0.19%), personal expenses (from 0.25% to -0.31%), and communication (from 0.10% to -0.05%). Education rose less (from 0.73% to 0.05%) and clothing (from 0.39% to 0.18%).

The IBGE calculates Brazil’s official inflation based on the consumption basket of families earning between one and 40 minimum wages, covering 10 metropolitan regions, along with the cities of Goiânia, Campo Grande, Rio Branco, São Luís, Aracaju, and Brasília.

Spread of inflation

Inflation became more widespread among the general items that make up the IPCA in September. The so-called Diffusion Index, which measures the proportion of goods and services with rising prices, increased to 56.5%, the highest since May (57.3%), up from 56% in August, according to Valor Data calculations that consider all items in the basket.

Excluding food, one of the more volatile groups, the index fell from 61.7% to 54.7%, returning to levels similar to June (54.5%) by these measures.

Core inflation average

The average of the five core IPCA components monitored by the Central Bank saw a slight decline to 0.22% in September, from 0.24% in August, according to calculations by MCM Consultores.

In the 12-month accumulated IPCA, the average of the five core components adjusted slightly from 3.80% to 3.81%.

The annual inflation target set by the Central Bank is 3% for 2024, 2025, and 2026, always with a tolerance range of 1.5 percentage points above or below.

*By Lucianne Carneiro, Valor — Rio de Janeiro

https://valorinternational.globo.com/