IBGE: IPCA has inflation of 0.28% in November – 12/12/2023 – Market

Pressured by food and air tickets, Brazil’s official inflation, measured by the IPCA (Extended National Consumer Price Index), accelerated to 0.28% in November, after reaching 0.24% in October.

Despite the acceleration, the rate of 0.28% is the lowest for the penultimate month of the year since 2018, when the IPCA fell by 0.21%, according to data released this Tuesday (12) by IBGE (Brazilian Institute of Geography and Statistics).

The new result was practically in line with the median expectations of the financial market. Analysts consulted by the Bloomberg agency projected a variation of 0.29% in November.

In the 12-month period, the IPCA slowed to 4.68%, below the inflation target ceiling for the year 2023 (4.75%). In this period, the price increase was 4.82% until October.

According to IBGE, prices for 6 of the 9 groups of products and services surveyed rose in November. The biggest change (0.63%) and the main impact (0.13 percentage points) came from food and beverages, which accelerated compared to October (0.31%).

“The higher temperatures and the greater volume of rain in several regions of the country are factors that influence the harvest of food, especially those most sensitive to the climate, such as tubers, legumes and vegetables”, said the manager of IPCA research, André Almeida.

Food at home rose 0.75% in November, influenced by increases in the prices of onions (26.59%), potatoes (8.83%), rice (3.63%) and meat (1 .37%).

On the decline side, the highlights were tomatoes (-6.69%), carrots (-5.66%) and long-life milk (-0.58%). Eating away from home (0.32%), in turn, slowed down in relation to the previous month (0.42%)

The housing (0.48%) and transport (0.27%) groups contributed 0.07 percentage points and 0.06 percentage points to the November IPCA, respectively.

In the first case, there was the influence of adjustments applied by public service concessionaires, said the IBGE. Residential electricity, for example, closed the month with prices rising 1.07%.

In the transport group, the increase of 0.27% was driven by the increase in airfare, which rose 19.12%. The ticket was the subitem with the highest individual contribution (0.14 percentage points) to the month’s index.

Still in transport, diesel oil (0.87%) and vehicle gas (0.05%) rose, while the prices of gasoline (-1.69%) and ethanol (-1.86%) fell.

The IPCA serves as a reference for the BC (Central Bank) inflation targeting regime. In 2023, the center of the measure pursued by the monetary authority is 3.25%.

The tolerance is 1.5 percentage points higher (4.75%) or lower (1.75%). In other words, the target will be met if the IPCA stays within this range until December.

On average, financial market analysts project a variation of 4.51% in the accumulated result for 2023, below the target ceiling (4.75%), according to the most recent edition of the Focus bulletin, released on Monday (11) by the BC .

This Tuesday, the Copom (BC Monetary Policy Committee) begins the last meeting of this year to define the level of the basic interest rate (Selic), the main instrument for controlling inflation. The meeting will resume this Wednesday (13), when the collegiate’s decision will be communicated.

With the IPCA truce in recent months, analysts expect the Copom to continue the cycle of interest rate cuts. The expectation is for a further reduction of 0.5 percentage points, which would take the Selic to 11.75% per year.