IPCA-15 for February is up 0.76%, says IBGE – 02/24/2023 – Market

Pressured by readjustments in the area of ​​education, inflation measured by the IPCA-15 (National Consumer Price Index 15) accelerated to 0.76% in February.

The rate came after an advance of 0.55% in January, according to data released this Friday (24) by the IBGE (Brazilian Institute of Geography and Statistics).

The new result was above market estimates. On the median, analysts consulted by the Bloomberg agency projected a high of 0.72% this month.

In the accumulated of 12 months, the IPCA-15 registered inflation of 5.63% until February. In this cut, there was a loss of momentum, since the rate was at 5.87% until the previous month.

Of the 9 groups of products and services surveyed, 8 had high prices in February. The greatest variation and the greatest impact on the IPCA-15 came from education. The group rose 6.41% in the month, with an influence of 0.36 percentage points on the index.

Next, housing (0.63% and 0.10 percentage points) and food and beverages (0.39% and 0.08 percentage points). Clothing was the only group with decrease (-0.05%) in February, after increasing in January (0.42%).

The official inflation index in Brazil is the IPCA (National Consumer Price Index), also released by the IBGE. As the IPCA variation is calculated over the reference month, the February data is not yet finalized. It will be known on March 10th.

The IPCA-15, due to the fact that it was released earlier, signals a trend for prices. Its variation is calculated between the second half of the previous month and the first half of the reference month of the release. In this case, price collection took place from January to February.

In 12 months, the IPCA-15 (5.63%) is above the inflation target pursued by the BC (Central Bank) for the IPCA in 2023. The center of the target is 3.25%, with a tolerance interval of 1 .5 percentage points up (4.75%) or down (1.75%).

The increase predicted by the financial market for the IPCA is 5.89% in the accumulated of 2023, according to the Focus bulletin published on Wednesday (22) by the BC. If the result is confirmed, this will be the third consecutive year of exceeding the goal.

With inflation still under pressure, the Central Bank has been maintaining the basic interest rate at 13.75% per year. The Selic at a high level seeks to cool the demand for goods and services, in an attempt to contain prices and anchor inflation expectations.

The expected side effect is the loss of momentum in economic activity, because the cost of credit is higher for companies and consumers.

In recent weeks, President Luiz Inácio Lula da Silva (PT) has piled up a series of criticisms of the BC’s actions and the institution’s president, Roberto Campos Neto. Lula stated that the Selic level is a “shame”, called the BC’s autonomy “nonsense” and referred to Campos Neto as “that citizen”.

The petista also defended a more flexible inflation target, hoping to make room for interest rate cuts, despite part of economists considering that the concrete effect would be the opposite, due to increasing uncertainties.