Resumption boosts services inflation and puts BC on alert

On the contrary of official consumer inflation in Brazil, which lost strength in the last two monthsthe prices of the services sector ended May with a higher price variation than the one calculated in April.

According to data from the IPCA (National Consumer Price Index), inflation in the sector responsible for 70% of GDP (Gross Domestic Product) was 0.85% in May, compared to a rise of 0.66% in the previous month. .

In the period, the significant increases in airline tickets (+18.33%), changes (+4.27%), pay TV (+4%), voluntary vehicle insurance (+3, 49%) and the forwarding agent (+3.34%).

The move prevented an even greater deceleration of the official inflation index, which went from a high of 1.06% in April to a rise of 0.47% in the month of May. With the variation, accumulated inflation for the 12-month period lost steam for the first time in a year, reaching 11.73%.


The acceleration of the specific index of the service sector is a result of the reopening process after the end of the restrictive measures, says the head of economy of Rico, Rachel de Sá. “Services inflation had been much weaker since the beginning of 2021 because people changed their behavior during the pandemic and switched from consumption of services to goods”, she evaluates.

The move has also put the BC (Central Bank) on alert. In the latest RTI (Quarterly Inflation Report), released on Thursday (30), the BC assesses that the normalization process of some service sectors in several emerging countries “should contribute to maintaining pressure on inflation rates”.

For the monetary authority, the movement contributed to the negative surprise of price indices. “The recent shocks have led to a substantial increase in food and fuel components, while inflation in services and industrial goods remains high. Underlying inflation measures have risen and remain at a level above the level compatible with meeting the target, indicating persistence of the inflationary process”, highlights the document.

Rachel points out that the highest prices in the sector come with a demand that was dammed during the pandemic. “No one cuts their hair twice for not having cut it before, but there are many other services that were dammed up, such as those related to travel and, especially those provided to families, which are now resuming”, he explains when reporting that the resumption influenced inflation. .


About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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