The General Price Index – Market (IGP-M) was 0.66% in August, compared to an increase of 0.78% in July, reported this Monday (30) the Getulio Vargas Foundation. With the result, it started to accumulate high of 16.75% in the year and 31.12% in 12 months.
The IGP-M is also known as ‘rent inflation’, as it serves as a parameter for the readjustment of residential lease contracts. In addition to the variation in consumer prices, the index also tracks the cost of primary products, raw materials and construction inputs.
Monthly variation of the IGP-M — Photo: Economy G1
Since 2020, the index has risen well above the country’s official inflation, measured by the IPCA.
In August 2020, the IGP-M accumulated an increase of 13.02% in 12 months.
“If it weren’t for the water crisis, the IGP-M would show a stronger deceleration. In the IPA, crops affected by the drought, such as corn (-4.58% to 10.97%) and coffee (0.04% to 20.98%) registered a strong increase in their prices. At the consumer level, the price of energy, for which a new readjustment is expected in September, increased by 3.26%, being the main influence on consumer inflation”, says André Braz, Coordinator of Price Indices.
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The deceleration of the IGP-M mainly reflected the 1.64% drop in the group of raw materials, which had increased 0.09% in the previous month. The main responsible for this reading were the items iron ore (2.70% to -15.32%), cattle (1.73% to -0.34%) and fresh milk (5.74% to 2. 32%).
See below the composition of the IGP-M:
- O Broad Producer Price Index (IPA), which has a 60% weight in the composition of the IGP-M, rose 0.66% in August, compared to 0.71% in July. In the analysis by stages of processing, the rate of the Finished Goods group rose 2.22% in August and the rate of the Intermediate Goods group advanced 2.11%. The stage of Raw Materials fell 1.64% in August. The items that weighed the most in the month were soy beans (7.78%), corn (10.97%), coffee (20.98%), fertilizers or fertilizers (10.62%) and poultry meat (8. 38%). On the other hand, the most relevant falls were in the prices of iron ore (-15.32%), beef (-1.42%), beef (-0.34%) and insulated electrical wires, cables and conductors (-1.10%).
- O Consumer Price Index (CPI), with a weight of 30% in the IGP-M, changed 0.75% in August, against 0.83% in July. Among the biggest hikes in the month, the highlights were residential energy tariffs (3.26%), gasoline (1.55%), tomatoes (14.60%) and bottled gas (3.34%).
- O National Construction Cost Index (INCC), with a weight of 10% in the IGP-M, rose 0.56% in August, compared to 1.24% in the previous month. The three component groups of the indicator recorded the following variations: materials and equipment (1.52% to 1.17%), services (0.65% to 0.78%) and labor (1.12% to zero) .
“Obviously we are at a high level of inflation and this relative improvement will not be felt by society in general, however we draw attention to the drop in the acceleration of consumer prices, which fell from 0.83% to 0.75%, suggesting that there is some stabilization on the margin”, evaluated, in a note, the economist at Necton, André Perfeito.