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A preview of the rate released last Tuesday by the IBGE points to a reduction in prices in several segments, such as fuel and food

 

By Jovem Pan 09/28/2022 09:20 am

    

Brazil Agency/Archive

11% increase in fuels pulled IPCA-15 in March

The transport group, driven mainly by gasoline, was the main influencer of the fall in the IPCA-15, but foodstuffs also had significant reductions in September; Official IPCA for the month may be even lower, around -0.30% and should be released next week

Brazil will register a negative rate of inflation, the so-called deflation, for two consecutive months. The ICPA-15, which is the preview of the rate, released last Tuesday, 27th, by the Brazilian Institute of Geography and Statistics (IBGE) pointed out that deflation should be around -0.37% this month, after already turned negative in August. The drop was basically anchored by the reduction in fuel prices, in the accounts of telephone operators, due to the ICMS ceiling established by the government, and because of a significant drop in food prices. André Braz, economist at the Brazilian Institute of Economics at Fundação Getúlio Vargas, believes that inflation for the year will get closer and closer to the target ceiling, which is 5%: “The good news of this IPCA-15 is that this fall did not stop contained only in the transport group. Gasoline played a very important role in this September perspective, but the food group also brought important news. The group rate was negative and this shows that basic food items are falling in price. Rice and beans were negative, meats were negative, several important items dropped in price. And that also contributed to this deflation of -0.37% in September. The IPCA for the month may be around -0.30% in September”, he opines. The official ICPA for September will be released next week.

 

Professor and economist Ruy Quintans assesses the prospect of new deflation in September: “The IPCA-15, which is calculated between the 16th of the previous month and the 15th of the reference month, is a kind of preview of the monthly IPCA. Therefore, it is quite likely that we still have a downward perspective in the IPCA release for September and a significant influence in the short term, until the end of the year 2022”. The drop in food prices is important, especially for the poorest families, who spend most of their budget on this type of expenditure, according to Ibmec professor Gilberto Braga. “In a symbolic and representative way, there was a reduction in the price of food, which is very important for the low-income population. On the other hand, the item that dropped the most in price was long-life milk, which is also a soft drink. Despite the drop in the price of milk, it still accumulates over 12 months more than a 50% increase, which is a lot for a population that depends on the product as a food source,” he explains.