Preview of inflation, IPCA-15 rose 0.89% in August, the highest increase for the month since 2002 and above market expectations

The Extended National Consumer Price Index 15 (IPCA-15) rose 0.89% in August compared to July, after registering a 0.72% increase in July 2021 in the monthly comparison. This result is the highest for a month of August since 2002, when it reached 1.00%. In the year, the indicator accumulates high of 5.81% and in the last 12 months, 9.30%. The data were released this Wednesday (25) by the Brazilian Institute of Geography and Statistics (IBGE).

The consensus projection of economists consulted by Refinitiv was up 0.82% in August compared to July and up 9.24% year-on-year.

With an increase of 5.00%, electricity had the greatest individual impact on the result, accounting for 0.23 percentage points in the month’s index. In the context of the water crisis, the level 2 red tariff flag was in effect in July and August. In addition, as of July 1st, there was a 52% readjustment in the banner’s additional value, which started to charge R$ 9,492 for each 100 kWh consumed (compared to R$ 6.243 in June).

Tariff adjustments in São Paulo, Porto Alegre, Curitiba and Belém also explain the result in August. With that, the housing group had the biggest increase in the month: 1.97%, equivalent to 0.31 percentage point of the general index. In addition to electricity, the housing group was influenced by increases in the prices of bottled gas (3.79%) and piped gas (0.73%).

The second largest contribution to the IPCA-15 in August came from transport, with an increase of 1.11%, followed by food and beverages (1.02%). The only drop was in health and personal care (-0.29%).

In the transport group, fuel prices (2.02%) increased compared to July (0.38%). The main contribution (0.12 pp) came from gasoline (2.05%), whose accumulated variation in the last 12 months was 39.52%. The prices of ethanol (2.19%) and diesel oil (1.37%) also rose, while vehicle gas fell by 0.51%.

On the other hand, there was deflation in the health and personal care group (-0.29%), which contributed with -0.04 pp to the general index. This is mainly due to the drop in prices of personal care items (-0.67%), pharmaceutical products (-0.48%) and health plan (-0.11%).

All areas surveyed presented inflation in August. The lowest result occurred in Belo Horizonte (0.40%), influenced by the drop in airline tickets (-20.05%) and water and sewage rates (-6.40%). The biggest change was registered in Goiânia (1.34%), where the rises in gasoline (6.31%) and electricity (3.60%) weighed.

Check out the methodology of the different indexes watching the video below:

(with IBGE News Agency)

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