IGP-M falls more than expected in April and has 1st deflation in 12 months since 2018

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It is the first time since February 2018 that the 12-month rate has turned negative. The General Market Price Index (IGP-M) retreated more than expected in April and started to show a drop of 2.17% in 12 months, showed data released by the Getulio Vargas Foundation (FGV) this Thursday (27 ). It is the first time since February 2018 that the 12-month rate has turned negative. In the month, the indicator fell by 0.95%, after registering a positive variation of 0.05% in the previous month, and against a decrease of 0.74% expected in a Reuters survey. The Broad Producer Price Index (IPA), which accounts for 60% of the general index and measures changes in wholesale prices, registered deflation of 1.45% in April, after falling 0.12% in the previous month. “The prices of important commodities for the productive sector continue to fall. Soybeans (-9.34%), corn (-4.33%) and iron ore (-4.41%) open space for the decompression of costs in important retail segments, favoring the arrival of these effects in consumer prices”, explained André Braz, coordinator of price indices The Consumer Price Index (CPI), which has a weight of 30% in the general index, slowed its increase to 0.46% in April, from 0.66% in the previous month. Despite the slowdown, Braz pointed out that consumer prices continue to be pressured by readjustments in administered prices, such as gasoline (2.39%), energy (1.31%) and medicines (2.02%). “In addition, services free markets also persist with high inflation. Among the items in this segment, it is worth highlighting residential rent, which increased by 1.31% in April”, he added. The National Construction Cost Index (INCC) rose 0.23% in the period, after rising 0.18% in March. The IGP-M calculates producer, consumer and civil construction prices between the 21st of the previous month and the 20th of the reference month.

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