The General Price Index – Market (IGP-M) stood at 0.21% in Julyafter having registered a high of 0.59% in June, informed this Thursday (28) the Fundação Getulio Vargas (FGV). It is the lowest rate since November 2021.
As a result, the index started to accumulate a high of 8.39% in the year and 10.08% in 12 monthsagainst 10.70% in the 12 months through June, remaining below the Extended National Consumer Price Index 15 (IPCA-15) – considered a preview of the country’s official inflation.
In July 2021, the index had risen 0.78% and accumulated a high of 33.83% in 12 months.
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“Prices of important commodities are falling, reflecting the risks of a less encouraging macroeconomic scenario. According to the producer index, there were important declines in the prices of iron ore (from -0.32% to -11.98%), corn (from -1.21% to -5.00%) and soybean ( from -0.80% to -2.05%). In terms of the consumer, the reduction in ICMS on electric energy (from -0.34% to -3.11%) and on gasoline (from -0.19% to -7.26%) had a significant influence on the IPC result, which registered a drop of 0.28%. If it weren’t for the reduction in ICMS, the CPI would not have registered a negative rate”, says André Braz, coordinator of Price Indexes.
The IGP-M is known as ‘rent inflation’ because it serves as a parameter for the readjustment of various contracts, such as real estate leases. In addition to the variation in consumer prices, the index also tracks the cost of primary products, raw materials, wholesale prices and construction inputs.
Understand the composition of the index
The IGP-M calculates producer, consumer and civil construction prices between the 21st of the previous month and the 20th of the reference month.
The indicator consists of 3 components:
- O Broad Producer Price Index (IPA), which has a weight of 60% in the composition of the IGP-M – the index changed 0.21% in July, compared to 0.30% in June. The main contribution came from fuels for consumption, whose rate went from -0.25% to 2.39%; From fuels and lubricants for production, whose percentage went from 6.81% to 9.96%; beyond the iron ore (-0.32% to -11.98%), seed cotton (2.28% to -14.02%) and corn in grain (-1.21% to -5.00%). In the opposite direction, the bovine items (-3.29% to 4.43%), raw milk (4.40% to 13.46%) and cassava / cassava (-4.24% to 8.02%).
- O Consumer Price Index (CPI), with a weight of 30% in the IGP-M – the index fell 0.28% in July, after rising 0.71% in June, especially gasoline, whose rate changed from -0.19% in June to -7.26% in July; airfare (13.40% to -5.20%), residential electricity tariff (-0.34% to -3.11%), toiletries and personal care (0.67% to -1.43%), clothes (1.75% to 0.65%) and Bank services (0.25% to 0.11%). In the opposite direction, there are dairy (4.33% to 11.16%) and telephony, internet and pay-TV combo (-1.22% to -0.30%).
- O National Construction Cost Index (INCC), with a weight of 10% in the IGP-M – the index rose 1.16% in July, compared to 2.81% in June, with deceleration in the three groups: materials and equipment (1.58% to 0.62%), services (0.50% to 0.49%) and labor (4.37% to 1.76%).